The History of the IEA 1974-1994, IEA the FIrst 20 Years, Vol. I ...
The History of the IEA 1974-1994, IEA the FIrst 20 Years, Vol. I ...
The History of the IEA 1974-1994, IEA the FIrst 20 Years, Vol. I ...
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INTERNATIONAL ENERGY AGENCY<br />
2, RUE ANDRÉ-PASCAL, 75775 PARIS CEDEX 16, FRANCE<br />
<strong>The</strong> International Energy Agency (<strong>IEA</strong>) is an autonomous body which was established in<br />
November <strong>1974</strong> within <strong>the</strong> framework <strong>of</strong> <strong>the</strong> Organisation for Economic Co-operation and<br />
Development (OECD) to implement an international energy programme.<br />
It carries out a comprehensive programme <strong>of</strong> energy co-operation among twenty-three*<br />
<strong>of</strong> <strong>the</strong> OECD’s twenty-four Member countries. <strong>The</strong> basic aims <strong>of</strong> <strong>the</strong> <strong>IEA</strong> are:<br />
i) co-operation among <strong>IEA</strong> participating countries to reduce excessive dependence on<br />
oil through energy conservation, development <strong>of</strong> alternative energy sources and<br />
energy research and development;<br />
ii) an information system on <strong>the</strong> international oil market as well as consultation with<br />
oil companies;<br />
iii) co-operation with oil producing and o<strong>the</strong>r oil consuming countries with a view to<br />
developing a stable international energy trade as well as <strong>the</strong> rational management<br />
and use <strong>of</strong> world energy resources in <strong>the</strong> interest <strong>of</strong> all countries;<br />
iv) a plan to prepare participating countries against <strong>the</strong> risk <strong>of</strong> a major disruption <strong>of</strong><br />
oil supplies and to share available oil in <strong>the</strong> event <strong>of</strong> an emergency.<br />
* <strong>IEA</strong> participating countries are: Australia, Austria, Belgium, Canada, Denmark, Finland, France,<br />
Germany, Greece, Ireland, Italy, Japan, Luxembourg, <strong>the</strong> Ne<strong>the</strong>rlands, New Zealand, Norway, Portugal, Spain,<br />
Sweden, Switzerland, Turkey, <strong>the</strong> United Kingdom, <strong>the</strong> United States. <strong>The</strong> Commission <strong>of</strong> <strong>the</strong> European<br />
Communities takes part in <strong>the</strong> work <strong>of</strong> <strong>the</strong> <strong>IEA</strong>.<br />
ORGANISATION FOR ECONOMIC CO-OPERATION AND<br />
DEVELOPMENT<br />
Pursuant to Article 1 <strong>of</strong> <strong>the</strong> Convention signed in Paris on 14th December 1960, and<br />
which came into force on 30th September 1961, <strong>the</strong> Organisation for Economic Co-operation<br />
and Development (OECD) shall promote policies designed:<br />
— to achieve <strong>the</strong> highest sustainable economic growth and employment and a rising<br />
standard <strong>of</strong> living in Member countries, while maintaining financial stability, and<br />
thus to contribute to <strong>the</strong> development <strong>of</strong> <strong>the</strong> world economy;<br />
— to contribute to sound economic expansion in Member as well as non-member<br />
countries in <strong>the</strong> process <strong>of</strong> economic development; and<br />
— to contribute to <strong>the</strong> expansion <strong>of</strong> world trade on a multilateral, non-discriminatory<br />
basis in accordance with international obligations.<br />
<strong>The</strong> original Member countries <strong>of</strong> <strong>the</strong> OECD are Austria, Belgium, Canada, Denmark,<br />
France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, <strong>the</strong> Ne<strong>the</strong>rlands, Norway,<br />
Portugal, Spain, Sweden, Switzerland, Turkey, <strong>the</strong> United Kingdom and <strong>the</strong> United States.<br />
<strong>The</strong> following countries became Members subsequently through accession at <strong>the</strong> dates indicated<br />
hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971)<br />
and New Zealand (29th May 1973). <strong>The</strong> Commission <strong>of</strong> <strong>the</strong> European Communities takes<br />
part in <strong>the</strong> work <strong>of</strong> <strong>the</strong> OECD (Article 13 <strong>of</strong> <strong>the</strong> OECD Convention).<br />
Any reference in <strong>the</strong> present publication to States, entities or territories which do not belong to<br />
<strong>the</strong> OECD shall nei<strong>the</strong>r imply <strong>the</strong>ir recognition by OECD Member States nor approval by OECD<br />
Member States <strong>of</strong> <strong>the</strong> designations used in <strong>the</strong> publication.<br />
© OECD/<strong>IEA</strong>, <strong>1994</strong><br />
Applications for permission to reproduce or translate all or part <strong>of</strong> this<br />
publication should be made to:<br />
Head <strong>of</strong> Publications Service, OECD<br />
2, rue André-Pascal, 75775 PARIS CEDEX 16, France
THE HISTORY OF THE INTERNATIONAL ENERGY AGENCY<br />
THE FIRST TWENTY YEARS<br />
VOLUME I<br />
ORIGINS AND STRUCTURES OF THE <strong>IEA</strong><br />
Table <strong>of</strong> Contents<br />
Executive Director’s Foreword....................................................... 11<br />
Table <strong>of</strong> Abbreviations .................................................................... 15<br />
Chapter I Introduction .............................................................. 19<br />
Chapter II Origins <strong>of</strong> <strong>the</strong> <strong>IEA</strong> .................................................... 27<br />
A. Economic and Political Origins: Crisis <strong>of</strong> 1973-<strong>1974</strong> ......................... 27<br />
1. Events Leading Up to <strong>the</strong> <strong>IEA</strong> ....................................................... 27<br />
2. Producer Countries’ Organization.................................................. 30<br />
3. Industrial Countries’ Institutional Arrangements ........................... 33<br />
4. Industrial Countries’ Responses ..................................................... 36<br />
B. Industrial Countries’ New Organizational Requirements .................... 38<br />
1. Lessons <strong>of</strong> <strong>the</strong> 1973-<strong>1974</strong> Crisis.................................................... 38<br />
2. Range <strong>of</strong> Institutional Alternatives................................................. 40<br />
3
C. Diplomatic and Institutional Steps to Establish <strong>the</strong> <strong>IEA</strong>...................... 43<br />
1. Pilgrims Society Speech ................................................................. 43<br />
2. Washington Energy Conference ..................................................... 45<br />
3. Energy Co-ordinating Group (ECG).............................................. 46<br />
4. Founders’ Objectives ..................................................................... 48<br />
5. OECD Council Decision................................................................. 49<br />
6. Agreement on an International Energy Program............................ 55<br />
7. Governing Board Decision on <strong>the</strong> Program .................................... 58<br />
Chapter III <strong>The</strong> I.E.P. Agreement <strong>of</strong> <strong>1974</strong> .............................. 61<br />
A. Legal Status <strong>of</strong> <strong>the</strong> I.E.P. Agreement in International Law.................. 63<br />
B. Legal Effect <strong>of</strong> <strong>the</strong> I.E.P. Agreement in <strong>the</strong> National Law<br />
<strong>of</strong> Members ........................................................................................ 64<br />
C. <strong>IEA</strong> Participating Countries, States, Signatory States<br />
and Governments ............................................................................... 66<br />
D. Provisional Application....................................................................... 67<br />
E. Consents to Be Bound ......................................................................... 69<br />
F. Absence <strong>of</strong> Reservations; Acceptance <strong>of</strong> Declarations.......................... 71<br />
G. Entry into Force ................................................................................. 73<br />
H. Accession ............................................................................................ 74<br />
I. Right <strong>of</strong> Accession <strong>of</strong> <strong>the</strong> European Communities<br />
(European Union)............................................................................... 76<br />
J. Application to Territories .................................................................... 79<br />
K. Amendments....................................................................................... 81<br />
L. Disputes.............................................................................................. 84<br />
4
M. Interpretation...................................................................................... 87<br />
N. General Review <strong>of</strong> <strong>the</strong> I.E.P................................................................. 91<br />
O. Depositary .......................................................................................... 93<br />
P. I.E.P. Agreement Languages ............................................................... 94<br />
Q. Withdrawal......................................................................................... 94<br />
R. Duration ............................................................................................. 95<br />
Chapter IV <strong>IEA</strong> Relationships .................................................... 97<br />
A. Membership in <strong>the</strong> <strong>IEA</strong>....................................................................... 97<br />
1. Signatories..................................................................................... 98<br />
2. Membership by Accession.............................................................. 99<br />
3. Exceptional Situation <strong>of</strong> Norway ................................................. 104<br />
4. Federal States.............................................................................. 110<br />
5. Territorial Changes: Germany...................................................... 114<br />
6. Policy Considerations and Recent Developments ......................... 114<br />
B. Obligations <strong>of</strong> Members .................................................................... 116<br />
1. Commitments Directly Under <strong>the</strong> I.E.P. Agreement ..................... 116<br />
2. Binding Decisions <strong>of</strong> <strong>the</strong> Governing Board ................................... 1<strong>20</strong><br />
3. O<strong>the</strong>r Actions <strong>of</strong> <strong>the</strong> Governing Board ......................................... 122<br />
4. Commitments Under O<strong>the</strong>r Agreements ...................................... 123<br />
5. Flexibility and Waiver <strong>of</strong> Rights Under <strong>the</strong><br />
I.E.P. Agreement.......................................................................... 125<br />
C. <strong>The</strong> <strong>IEA</strong> as an Autonomous Agency <strong>of</strong> <strong>the</strong> OECD............................. 129<br />
1. <strong>The</strong> <strong>IEA</strong>-OECD Legal Relationship in General ............................ 129<br />
2. Programme Autonomy <strong>of</strong> <strong>the</strong> <strong>IEA</strong>................................................ 132<br />
3. Financial Autonomy <strong>of</strong> <strong>the</strong> <strong>IEA</strong> ................................................... 135<br />
4. Autonomy in Personnel Questions ............................................... 138<br />
5
D. Competence in External Relations .................................................... 143<br />
1. General Purposes and Powers ................................................... 143<br />
2. Committee on Non-Member Countries (NMC) ........................... 147<br />
3. Situation <strong>of</strong> <strong>the</strong> European Communities<br />
(European Union) ...................................................................... 151<br />
4. Capacity to Enter into International Agreements........................ 155<br />
Chapter V Internal Structure <strong>of</strong> <strong>the</strong> <strong>IEA</strong> ............................... 157<br />
A. <strong>The</strong> Governing Board ....................................................................... 157<br />
1. Functions and Competence ........................................................ 157<br />
2. Composition............................................................................... 161<br />
3. Meetings at Ministerial and Official Levels ................................. 162<br />
4. Informal Meetings ...................................................................... 167<br />
5. Place and Frequency <strong>of</strong> Meetings ............................................... 169<br />
6. Convening Meetings ................................................................... 171<br />
7. Representation ........................................................................... 172<br />
8. Rules <strong>of</strong> Procedure ..................................................................... 173<br />
9. Closed and Open Meetings ......................................................... 176<br />
10. Observers ................................................................................... 177<br />
11. Officers and Elections ................................................................ 180<br />
12. Agendas ..................................................................................... 182<br />
13. Voting and Consensus ............................................................... 184<br />
(a) Unanimity ............................................................................ 188<br />
(b) I.E.P. Majority ...................................................................... 189<br />
(c) First Special Majority............................................................ 193<br />
(d) Second Special Majority ....................................................... 195<br />
(e) Norway and <strong>IEA</strong> Voting........................................................ 196<br />
14. Abstentions ................................................................................ <strong>20</strong>0<br />
15. Written Procedure ...................................................................... <strong>20</strong>1<br />
16. Effect <strong>of</strong> Actions: Decisions, Recommendations,<br />
Declarations, Conclusions and O<strong>the</strong>rs ........................................ <strong>20</strong>5<br />
(a) Political Commitments ......................................................... <strong>20</strong>6<br />
(b) Legal Commitments ............................................................. 210<br />
(c) Recommendations................................................................. 215<br />
6
17. Creation <strong>of</strong> O<strong>the</strong>r Organs ........................................................... 217<br />
(a) Committee on Budget and Expenditure (BC)........................ 218<br />
(b) Committee on Energy Research and<br />
Technology (CERT) ............................................................. 218<br />
(c) Committee on Non-Member Countries (NMC)...................... 219<br />
(d) Industry Advisory Board (IAB)............................................. 2<strong>20</strong><br />
(e) Coal Industry Advisory Board (CIAB)................................... 221<br />
18. Special Activities ........................................................................ 222<br />
19. Conclusions and Minutes............................................................ 224<br />
(a) Governing Board Meetings at Official Level.......................... 224<br />
(b) Ministerial Level Meetings.................................................... 227<br />
<strong>20</strong>. Management Committee ............................................................ 228<br />
B. <strong>The</strong> Standing Groups........................................................................ 230<br />
1. Function and Competence.......................................................... 230<br />
2. Procedures ................................................................................. 234<br />
C. <strong>The</strong> Committees................................................................................ 236<br />
1. Function and Competence.......................................................... 237<br />
2. Procedures................................................................................... 240<br />
Chapter VI <strong>The</strong> Secretariat ....................................................... 241<br />
A. Powers <strong>of</strong> <strong>the</strong> Governing Board......................................................... 242<br />
B. Establishment <strong>of</strong> <strong>the</strong> Secretariat ....................................................... 244<br />
C. Relation to <strong>the</strong> OECD ....................................................................... 247<br />
D. Combined Energy Staff..................................................................... 248<br />
1. Establishment ............................................................................ 248<br />
2. Services to <strong>the</strong> OECD................................................................. 252<br />
7
E. <strong>The</strong> Executive Director ..................................................................... 254<br />
1. Functions ................................................................................... 254<br />
2. Appointment .............................................................................. 259<br />
3. Voting Rule for Appointments .................................................... 261<br />
4. Term <strong>of</strong> Office ............................................................................ 262<br />
5. Conditions <strong>of</strong> Service.................................................................. 264<br />
F. <strong>The</strong> Deputy Executive Director......................................................... 264<br />
1. Functions ................................................................................... 264<br />
2. Appointment .............................................................................. 265<br />
3. Term <strong>of</strong> Office ............................................................................ 267<br />
4. Conditions <strong>of</strong> Service.................................................................. 267<br />
G. Staff Policies and Conditions <strong>of</strong> Service ............................................ 268<br />
Chapter VII<br />
Programmes <strong>of</strong> Work,<br />
Budgets and Finance ............................................ 273<br />
A. Introductory Summary ..................................................................... 273<br />
B. Programmes <strong>of</strong> Work ........................................................................ 276<br />
1. Function .................................................................................... 276<br />
2. Content and Style....................................................................... 281<br />
3. Procedure................................................................................... 282<br />
C. Budgets............................................................................................. 285<br />
1. Function .................................................................................... 285<br />
2. Content and Style....................................................................... 286<br />
3. Procedure................................................................................... 288<br />
D. Governing Board Functions and Procedures ..................................... 290<br />
E. Committee on Budget and Expenditure ............................................ 293<br />
8
F. Members’ Financing Obligation ........................................................ 295<br />
G. Scale <strong>of</strong> Contributions....................................................................... 297<br />
1. Calculation................................................................................. 297<br />
2. Membership Changes ................................................................. 300<br />
3. Procedure................................................................................... 302<br />
H. <strong>Vol</strong>untary Contributions and Grants ................................................. 303<br />
1. Authority ................................................................................... 303<br />
2. Description <strong>of</strong> Contributions ...................................................... 303<br />
3. Alternative Financing................................................................. 304<br />
4. Procedures ................................................................................. 305<br />
I. Financial Regulations ....................................................................... 306<br />
J. Expenditure for Special Activities ..................................................... 310<br />
K. Audits............................................................................................... 312<br />
Chapter VIII General Principles <strong>of</strong> <strong>the</strong> Agency...................... 317<br />
A. Operational Efficiency ...................................................................... 317<br />
B. Security ............................................................................................ 318<br />
1. Brief Description <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Security System.............................. 323<br />
2. Security During <strong>the</strong> Gulf Crisis (1990 - 1991) ........................... 329<br />
3. Policy <strong>of</strong> Openness ..................................................................... 331<br />
C. Languages ........................................................................................ 332<br />
D. Documents........................................................................................ 339<br />
9
Appendices....................................................................................... 343<br />
Appendix I Membership .................................................................. 343<br />
Appendix II<br />
Officers <strong>of</strong> <strong>the</strong> Governing Board at<br />
Ministerial and Official Level, Standing<br />
Groups and Committees................................................. 345<br />
Appendix III<br />
Agreement on an International Energy<br />
Program......................................................................... 353<br />
Appendix IV<br />
OECD Council Decision on <strong>the</strong> Establishment<br />
<strong>of</strong> <strong>the</strong> Agency................................................................. 405<br />
Appendix V Organization <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Secretariat ............................... 411<br />
Appendix VI<br />
Highlights <strong>of</strong> Principal <strong>IEA</strong><br />
Events <strong>1974</strong>-1993 ......................................................... 413<br />
10
Foreword<br />
<strong>The</strong> International Energy Agency celebrates in <strong>1994</strong> <strong>the</strong> twentieth<br />
anniversary <strong>of</strong> its founding. <strong>The</strong> marking <strong>of</strong> this event presents <strong>the</strong><br />
occasion for a systematic look back at <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency’s origins,<br />
structures, policies and actions. Focusing on <strong>the</strong> main industrial countries’<br />
co-operation on energy policy, <strong>the</strong> history begins with <strong>the</strong> troubled days <strong>of</strong><br />
<strong>the</strong> 1973-<strong>1974</strong> Middle East War crisis and its immediate aftermath, when<br />
<strong>the</strong> oil producers appeared relatively well organized to utilize <strong>the</strong>ir new oil<br />
based economic and political power, while <strong>the</strong> industrial countries were<br />
inadequately equipped with information and organization to meet <strong>the</strong><br />
corresponding challenges to <strong>the</strong>m.<br />
<strong>The</strong> vulnerability <strong>of</strong> <strong>the</strong> industrial countries was dramatized in <strong>the</strong><br />
course <strong>of</strong> <strong>the</strong> crisis by <strong>the</strong> Arab embargo and <strong>the</strong> shock <strong>of</strong> rapidly rising<br />
prices for oil. During <strong>the</strong> years leading up to <strong>the</strong> crisis, <strong>the</strong> industrial<br />
countries became increasingly dependent upon oil imported mainly from<br />
one region known for its political fragility. <strong>The</strong> reasons for this dependence<br />
are well understood. <strong>The</strong> industrial countries permitted excessive and even<br />
wasteful and inefficient use <strong>of</strong> energy and <strong>of</strong> oil in particular. Energy<br />
conservation measures in those countries were woefully underdeveloped.<br />
<strong>The</strong>ir oil production potential was not fully realized, nor was sufficient<br />
investment devoted to <strong>the</strong> development <strong>of</strong> o<strong>the</strong>r energy sources as<br />
alternatives to oil. <strong>The</strong>y had yet to devise a workable system for responding<br />
to serious disruptions in oil supply; and <strong>the</strong>ir organizational arrangements<br />
for co-operation could not enable <strong>the</strong>m to cope effectively with <strong>the</strong><br />
institutional implications <strong>of</strong> those situations. All considered, a surer<br />
formula for <strong>the</strong> eruption <strong>of</strong> disagreeable surprises would be difficult to<br />
imagine.<br />
One constructive outcome <strong>of</strong> <strong>the</strong> crisis was <strong>the</strong> sudden and intense<br />
attention that governments and populations in <strong>the</strong> industrial countries<br />
concentrated on “<strong>the</strong> energy problem”, and this soon brought calls for rapid<br />
11
esponses by policy makers. In situations <strong>of</strong> short supply in energy,<br />
“beggar-my-neighbour” policies would have to be avoided as tending to<br />
worsen and expand economic hardship, while <strong>the</strong> adoption <strong>of</strong> burden<br />
sharing arrangements and policies designed to mitigate economic hardship<br />
would have to be formulated and implemented. <strong>The</strong> policy and<br />
institutional lessons <strong>of</strong> <strong>the</strong> crisis led swiftly in November <strong>1974</strong> to <strong>the</strong><br />
establishment <strong>of</strong> <strong>the</strong> <strong>IEA</strong> with a broad mandate on energy security and<br />
o<strong>the</strong>r questions <strong>of</strong> energy policy co-operation among Member countries.<br />
<strong>The</strong> main policy decisions and <strong>the</strong> Agency framework were firmly anchored<br />
in <strong>the</strong> <strong>IEA</strong> treaty called <strong>the</strong> “Agreement on an International Energy<br />
Program”, and <strong>the</strong> new Agency was lodged as a mutual convenience at <strong>the</strong><br />
OECD in Paris. <strong>The</strong> Agency would become, as this <strong>History</strong> shows, <strong>the</strong> focal<br />
point for <strong>the</strong> industrial countries’ energy co-operation on such issues as:<br />
security <strong>of</strong> supply, long-term policy, information “transparency”, energy<br />
and <strong>the</strong> environment, research and development and international energy<br />
relations.<br />
Over <strong>the</strong> ensuing twenty years, <strong>the</strong> Agency’s operational mandate has<br />
expanded, particularly in <strong>the</strong> sectors <strong>of</strong> energy and <strong>the</strong> environment and cooperation<br />
with non-Member countries, without reducing <strong>the</strong> importance <strong>of</strong><br />
ensuring <strong>the</strong> overall objective <strong>of</strong> security <strong>of</strong> energy supply in adequate<br />
amounts at affordable prices. Since <strong>the</strong> establishment <strong>of</strong> <strong>the</strong> Agency, energy<br />
markets have become more global and transparent, with decisive effects<br />
upon <strong>the</strong> balance <strong>of</strong> supply and demand. Hence <strong>IEA</strong> Members are giving<br />
high priority to <strong>the</strong> improvement <strong>of</strong> energy policies, which contributes to <strong>the</strong><br />
equilibrium <strong>of</strong> world energy markets, and to <strong>the</strong> sharing <strong>of</strong> experience and<br />
longer-term perspectives not only among <strong>the</strong>mselves but also with <strong>the</strong> rest<br />
<strong>of</strong> <strong>the</strong> energy consuming and producing world.<br />
<strong>Vol</strong>ume I <strong>of</strong> <strong>the</strong> <strong>History</strong> recounts <strong>the</strong>se events from <strong>the</strong> crisis period<br />
through <strong>the</strong> diplomatic response stage, <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> institutional<br />
instruments and <strong>the</strong> start-up <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, and examines <strong>the</strong> evolving<br />
structure <strong>of</strong> <strong>the</strong> Agency over its first twenty years. This description and<br />
analysis <strong>of</strong> <strong>the</strong> Agency’s origins and structures will be followed by <strong>Vol</strong>ume II<br />
which will take up more specifically, sector by sector during <strong>the</strong> same<br />
period, <strong>the</strong> activities <strong>of</strong> <strong>the</strong> Agency, Members’ co-operation on energy<br />
policies and <strong>IEA</strong> operations. <strong>Vol</strong>ume III will contain a collection <strong>of</strong> <strong>the</strong> key<br />
reference documents on <strong>IEA</strong> activities discussed in <strong>the</strong> <strong>History</strong>.<br />
In producing this work at my request, Richard Scott, an <strong>IEA</strong> Senior<br />
Consultant, has drawn upon his <strong>IEA</strong> experience going back to <strong>the</strong> <strong>1974</strong><br />
negotiations on <strong>the</strong> Agreement and continuing during most <strong>of</strong> <strong>the</strong> past<br />
twenty years in which he served <strong>the</strong> Agency as its chief Legal Counsel.<br />
12
Although <strong>the</strong> author was afforded Secretariat assistance and direct access to<br />
all <strong>IEA</strong> documentation, he has prepared this <strong>History</strong> entirely upon his<br />
independent responsibility and not as a representative <strong>of</strong> <strong>the</strong> Agency, thus<br />
enhancing <strong>the</strong> work’s objectivity and overall usefulness. <strong>The</strong> author’s<br />
independent views may not necessarily coincide, <strong>of</strong> course, with those <strong>of</strong> <strong>the</strong><br />
Agency, its Member countries or <strong>the</strong> Secretariat.<br />
I gratefully acknowledge <strong>the</strong> valuable contribution made by Mr. Scott<br />
in producing this book and <strong>the</strong> assistance provided by many present and<br />
past colleagues in <strong>the</strong> Agency. I wish particularly to acknowledge <strong>the</strong><br />
leading roles <strong>of</strong> my predecessor Executive Director, Dr. Ulf Lantzke, and <strong>the</strong><br />
two successive Deputy Executive Directors who served <strong>the</strong> <strong>IEA</strong> during <strong>the</strong><br />
past twenty years, Messrs J. Wallace Hopkins and John P. Ferriter, in<br />
developing <strong>the</strong> Agency into <strong>the</strong> effective instrument for energy policy cooperation<br />
it has become today.<br />
Helga Steeg<br />
Executive Director<br />
13
INTERNATIONAL ENERGY AGENCY<br />
Table <strong>of</strong> Abbreviations<br />
ADD<br />
AHGIER<br />
AST<br />
bbl<br />
BC<br />
BPFC<br />
C<br />
CADDET<br />
CCH<br />
CEC<br />
CEET<br />
CERM<br />
CERT<br />
CES<br />
CIAB<br />
CIF<br />
CORR<br />
CPE<br />
CRD<br />
CVW<br />
DAE<br />
DED<br />
DG<br />
DSC<br />
EC<br />
EEC<br />
Addendum<br />
Ad Hoc Group on International Energy Relations<br />
Allocation Systems Test<br />
price (<strong>of</strong> oil) per barrel<br />
Budget Committee<br />
Base Period Final Consumption<br />
Council<br />
Centre for Analysis and Dissemination <strong>of</strong> Demonstrated<br />
Energy Technologies<br />
Commerce Clearing House<br />
Commission <strong>of</strong> <strong>the</strong> European Communities (European<br />
Commission)<br />
Centre for European Economies in Transition<br />
Co-ordinated Emergency Response Measures<br />
Committee on Energy Research and Technology<br />
Council and Executive Secretariat<br />
Coal Industry Advisory Board<br />
Cost, Insurance and Freight<br />
Corrigendum<br />
Centrally Planned Economies<br />
Committee on Energy Research and Development<br />
Combined Voting Weights<br />
Dynamic Asian Economies<br />
Deputy Executive Director<br />
Direction Générale <strong>of</strong> <strong>the</strong> European Commission<br />
Dispute Settlement Centre<br />
European Communities<br />
European Economic Community<br />
15
ECG Energy Co-ordinating Group<br />
ECMT European Conference <strong>of</strong> Ministers <strong>of</strong> Transport<br />
EET European Economies in Transition<br />
EMM Emergency Management Manual<br />
EPCA Energy Policy Conservation Act (United States, 1975)<br />
ESS Emergency Sharing System<br />
EU European Union<br />
EXD Executive Director<br />
GATT General Agreement on Tariffs and Trade<br />
GREENTIE Greenhouse Gas Technology Information Exchange<br />
GVW General Voting Weights<br />
IAB<br />
IAEA<br />
ICJ<br />
<strong>IEA</strong><br />
I.E.P.<br />
IIAB<br />
IPCC<br />
ISAG<br />
IWP<br />
LTCP<br />
mbd<br />
NATO<br />
NEA<br />
NMC<br />
NESO<br />
NIS<br />
OAPEC<br />
OECD<br />
OEEC<br />
OLADE<br />
OLC<br />
OLIS<br />
OPEC<br />
Industry Advisory Board<br />
International Atomic Energy Agency<br />
International Court <strong>of</strong> Justice<br />
International Energy Agency<br />
International Energy Program<br />
International Industry Advisory Body<br />
Intergovernmental Panel on Climate Change<br />
Industry Supply Advisory Group<br />
Industry Working Party<br />
Long-Term Co-operation Programme<br />
million barrels (<strong>of</strong> oil) a day<br />
North Atlantic Treaty Organization<br />
Nuclear Energy Agency<br />
Committee on Non-Member Countries<br />
National Emergency Sharing Organisation<br />
Newly Independent States<br />
Organization <strong>of</strong> Arab Petroleum Exporting Countries<br />
Organisation for Economic Co-operation and Development<br />
Organisation for European Economic Co-operation<br />
Latin American Energy Organization<br />
Office <strong>of</strong> <strong>the</strong> Legal Counsel<br />
On-Line Information Service<br />
Organization <strong>of</strong> Petroleum Exporting Countries<br />
16
ORGA<br />
OVW<br />
PROV<br />
QA<br />
QB<br />
QC<br />
R & D<br />
R D & D<br />
REV<br />
`<br />
SEQ<br />
SFRY<br />
SLT<br />
SOM<br />
SPC<br />
UNCED<br />
UNTS<br />
Official Records <strong>of</strong> <strong>the</strong> General Assembly<br />
Oil Consumption Voting Weights<br />
Provisional<br />
Questionnaire A<br />
Questionnaire B<br />
Questionnaire C<br />
Research and Development<br />
Research, Development and Demonstration<br />
Revision<br />
Standing Group on Emergency Questions<br />
Socialist Federal Republic <strong>of</strong> Yugoslavia<br />
Standing Group on Long-Term Co-operation<br />
Standing Group on <strong>the</strong> Oil Market<br />
Standing Group on Relations with Producer and O<strong>the</strong>r<br />
Consumer Countries<br />
United Nations Conference on Environment and Development<br />
United Nations Treaty Series<br />
17
CHAPTER I<br />
Introduction<br />
During <strong>the</strong> Middle East War crisis <strong>of</strong> 1973-<strong>1974</strong>, <strong>the</strong> main industrial<br />
countries became painfully aware <strong>of</strong> <strong>the</strong>ir vulnerability to <strong>the</strong> new<br />
economic power <strong>of</strong> <strong>the</strong> oil producer countries. For <strong>the</strong> industrial countries,<br />
<strong>the</strong> sting in that crisis derived from <strong>the</strong>ir sudden need to respond to <strong>the</strong> oil<br />
embargo by a number <strong>of</strong> Arab producers and from <strong>the</strong> price spike that took<br />
oil prices rapidly to historic and damagingly high levels. Perhaps even more<br />
troublesome, however, was <strong>the</strong> realization that, having accepted for some<br />
years <strong>the</strong> short-term luxury <strong>of</strong> growing oil import dependence, <strong>the</strong> industrial<br />
countries were <strong>the</strong>mselves largely responsible for <strong>the</strong> very predicament in<br />
which <strong>the</strong>y suddenly found <strong>the</strong>mselves.<br />
As discomforting as that realization might have been at <strong>the</strong> time, it<br />
became <strong>the</strong> wellspring <strong>of</strong> <strong>the</strong> industrial countries’ response and was a<br />
necessary step in building <strong>the</strong> new institutional systems which could<br />
make <strong>the</strong> problems more manageable. One promising element was <strong>the</strong><br />
notion that if those countries bore <strong>the</strong>ir share <strong>of</strong> <strong>the</strong> responsibility for<br />
causing <strong>the</strong> crisis, <strong>the</strong>y might find within <strong>the</strong>mselves <strong>the</strong> means <strong>of</strong><br />
resolving or controlling <strong>the</strong> situation in <strong>the</strong> future. <strong>The</strong>ir contributions to<br />
<strong>the</strong> extent <strong>of</strong> <strong>the</strong> crisis had included excessive reliance on oil generally<br />
and imported oil in particular, insufficient investment in indigenous oil<br />
exploration and exploitation, in diversification <strong>of</strong> energy sources and in<br />
<strong>the</strong> development <strong>of</strong> energy technologies. To this list must be added weak<br />
conservation and energy efficiency measures, inadequate collection and<br />
use <strong>of</strong> data on <strong>the</strong> operation <strong>of</strong> <strong>the</strong> oil market and <strong>the</strong> absence <strong>of</strong><br />
arrangements for workable systems <strong>of</strong> oil supply shortfall management.<br />
Increasing <strong>the</strong> industrial countries’ vulnerability still fur<strong>the</strong>r was <strong>the</strong>ir<br />
capstone failure to organize <strong>the</strong>mselves properly by means <strong>of</strong> institutions<br />
designed to deal successfully with those problems and o<strong>the</strong>rs to come in<br />
<strong>the</strong> years ahead.<br />
Realization <strong>of</strong> <strong>the</strong> scope <strong>of</strong> <strong>the</strong>se shortcomings gave <strong>the</strong> industrial<br />
countries <strong>the</strong> impetus to join toge<strong>the</strong>r to take <strong>the</strong> rapid, decisive and<br />
innovative remedial action through organized international co-operation. In<br />
19
order for <strong>the</strong>ir combined efforts to be effective, <strong>the</strong> main industrial countries<br />
in North America, Western Europe and <strong>the</strong> Far East, already grouped<br />
toge<strong>the</strong>r in <strong>the</strong> OECD, would have to participate in strength in a new energy<br />
agency. <strong>The</strong> International Energy Agency was <strong>the</strong> co-operation vehicle <strong>the</strong>y<br />
created to ensure <strong>the</strong>ir future energy security (including an emergency oil<br />
sharing system) and <strong>the</strong> optimum management <strong>of</strong> <strong>the</strong> energy policy<br />
problems which had led <strong>the</strong>m into <strong>the</strong> crisis.<br />
Although <strong>the</strong> international system did not <strong>the</strong>n <strong>of</strong>fer co-operative<br />
organizations with suitable, ready-made institutional solutions, <strong>the</strong> system<br />
did provide <strong>the</strong> means to establish a suitable institutional arrangement in a<br />
short period <strong>of</strong> time. <strong>The</strong> system had already produced a multitude <strong>of</strong><br />
international organizations in many different configurations for a variety <strong>of</strong><br />
purposes, and thus provided guidance and a wealth <strong>of</strong> experience to draw<br />
upon or steer away from. In <strong>the</strong> forming <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, <strong>the</strong> key instruments<br />
proved to be international treaty law and <strong>the</strong> use <strong>of</strong> a treaty to establish an<br />
intergovernmental organization designed to meet <strong>the</strong> particular problems <strong>of</strong><br />
<strong>the</strong> industrial countries. <strong>The</strong> venerable treaty device was utilized on<br />
18 November <strong>1974</strong> in <strong>the</strong> form <strong>of</strong> <strong>the</strong> “Agreement on an International<br />
Energy Program” [usually called <strong>the</strong> “I.E.P. Agreement”, reproduced below<br />
in Appendix III].<br />
<strong>The</strong> I.E.P. Agreement set forth in formally binding terms <strong>the</strong><br />
necessary provisions for <strong>the</strong> oil Emergency Sharing System and o<strong>the</strong>r<br />
elements <strong>of</strong> <strong>the</strong> Agency, and provided <strong>the</strong> framework for co-operation.<br />
Although <strong>the</strong> main objective <strong>of</strong> <strong>the</strong> founders was to build <strong>the</strong> means <strong>of</strong><br />
managing <strong>the</strong> immediate problems before <strong>the</strong>m, principally energy security<br />
and long-term energy policy co-operation, <strong>the</strong>ir vision in fact went much<br />
fur<strong>the</strong>r. <strong>The</strong> founders broadened <strong>the</strong> Agency’s mandate to include future<br />
situations which could not be fully anticipated in <strong>1974</strong>. This approach<br />
enabled <strong>the</strong> Agency to respond later to a number <strong>of</strong> new situations,<br />
including oil supply disruptions below <strong>the</strong> <strong>IEA</strong> Emergency Sharing System<br />
threshold levels, <strong>the</strong> 1990-1991 Gulf crisis, <strong>the</strong> growing importance <strong>of</strong><br />
“energy and <strong>the</strong> environment” questions and <strong>the</strong> changes in Central and<br />
Eastern Europe and many o<strong>the</strong>r regions.<br />
Yet time was <strong>of</strong> <strong>the</strong> essence in <strong>1974</strong>. <strong>The</strong> treaty rule permitting<br />
“provisional application” <strong>of</strong> <strong>the</strong> I.E.P. Agreement was utilized to launch <strong>the</strong><br />
Agency long before that Agreement could enter into force under <strong>the</strong><br />
applicable formal rules. <strong>The</strong> OECD provided rapid logistical support and<br />
was ready to accept <strong>the</strong> <strong>IEA</strong> as an “autonomous Agency”. While instant<br />
action during <strong>the</strong> crisis itself was not to be realistically expected, <strong>the</strong><br />
international system already in place gave <strong>the</strong> Agency <strong>the</strong> benefit <strong>of</strong> a<br />
<strong>20</strong>
olling start within months after <strong>the</strong> crisis. <strong>The</strong> Agency could commence<br />
operations on <strong>the</strong> day that <strong>the</strong> I.E.P. Agreement was signed.<br />
<strong>The</strong> <strong>IEA</strong> was distinguished almost immediately for its institutional<br />
innovations designed to meet <strong>the</strong> industrial countries’ particular<br />
requirements, and for <strong>the</strong> spirit in which <strong>the</strong> Agency carried out its tasks.<br />
<strong>The</strong> new co-operative arrangements could succeed only if a number <strong>of</strong> vital<br />
conditions were satisfied. Those conditions and <strong>the</strong> institutional outcomes<br />
may be summarized as follows:<br />
1. <strong>The</strong> joining <strong>of</strong> <strong>the</strong> main industrial countries in <strong>IEA</strong> membership.<br />
<strong>The</strong>re were sixteen Member countries at <strong>the</strong> outset; <strong>the</strong>re are now twentythree<br />
participants, all OECD countries except Iceland. <strong>The</strong> possibility <strong>of</strong><br />
still fur<strong>the</strong>r extensions <strong>of</strong> membership has not been excluded.<br />
2. <strong>The</strong> adoption in legally binding form <strong>of</strong> <strong>the</strong> key elements <strong>of</strong> <strong>the</strong><br />
Program, particularly <strong>the</strong> oil Emergency Sharing System. That was<br />
accomplished by inclusion in <strong>the</strong> treaty <strong>of</strong> <strong>the</strong> key formulations on <strong>the</strong><br />
Emergency Sharing System toge<strong>the</strong>r with <strong>the</strong> corresponding rules on<br />
structure and procedure.<br />
3. <strong>The</strong> establishment and operation <strong>of</strong> a workable process for<br />
objective, rapid and effective decision-making. That condition was<br />
realized by lodging <strong>the</strong> power <strong>of</strong> decision in <strong>the</strong> <strong>IEA</strong>’s Governing Board, in<br />
<strong>the</strong> hands <strong>of</strong> high level <strong>of</strong>ficials holding positions <strong>of</strong> policy responsibility in<br />
<strong>the</strong> Member governments. <strong>The</strong> Board’s decisions are made in practice by<br />
consensus, despite <strong>the</strong> existence <strong>of</strong> an elaborate system <strong>of</strong> formal voting<br />
rules. Those rules are rarely applied explicitly and directly, because<br />
normally Members nei<strong>the</strong>r invoke <strong>the</strong>m nor require that issues be brought<br />
to a formal vote (even for institutional issues such as Budgets and<br />
Programmes <strong>of</strong> Work). <strong>The</strong> <strong>IEA</strong> voting rules are not entirely dominated by<br />
<strong>the</strong> traditional doctrine <strong>of</strong> sovereign equality but reflect also <strong>the</strong> Members’<br />
relative economic stakes in <strong>the</strong> outcome <strong>of</strong> <strong>the</strong> Agency’s activities. <strong>The</strong> <strong>IEA</strong><br />
system <strong>of</strong> weighted voting, based in large part on <strong>the</strong> oil consumption <strong>of</strong><br />
each Member and majority voting on most decisions to be taken by Agency<br />
bodies, is a discrete but valuable element <strong>of</strong> support for <strong>IEA</strong> objectives.<br />
4. <strong>The</strong> conferring <strong>of</strong> unprecedented powers upon an international<br />
Secretariat to activate an oil emergency sharing system and carry out<br />
o<strong>the</strong>r actions. As an impartial body in <strong>the</strong> established tradition <strong>of</strong><br />
intergovernmental organizations, <strong>the</strong> new Secretariat was empowered to<br />
21
make <strong>the</strong> objective administrative findings which would be necessary to<br />
activate <strong>the</strong> <strong>IEA</strong>’s Emergency Sharing System without <strong>the</strong> need for prior<br />
political decisions. This was assured by fail-safe mechanisms built into <strong>the</strong><br />
I.E.P. Agreement and by <strong>the</strong> continuing state <strong>of</strong> readiness <strong>of</strong> <strong>the</strong> Secretariat<br />
members to take <strong>the</strong> necessary actions.<br />
5. <strong>The</strong> establishment <strong>of</strong> new forms <strong>of</strong> co-operation on long-term<br />
energy policies. This was accomplished in broad terms in <strong>the</strong> I.E.P<br />
Agreement, developed in <strong>the</strong> Long-Term Co-operation Programme adopted<br />
in 1976 and developed fur<strong>the</strong>r in later actions <strong>of</strong> <strong>the</strong> Governing Board on<br />
alternative energy sources, conservation and efficiency and research and<br />
development. A recent example is <strong>the</strong> adoption by <strong>IEA</strong> Ministers in 1993 <strong>of</strong><br />
an up-dated statement on “<strong>IEA</strong> Shared Goals” that provide a basis for<br />
developing <strong>the</strong>ir energy policies.<br />
6. Finally, <strong>the</strong> integration <strong>of</strong> <strong>the</strong> foregoing elements into a workable<br />
organizational structure. Governments sought mechanisms for energy cooperation<br />
in an atmosphere <strong>of</strong> flexibility and operational efficiency, where<br />
<strong>the</strong> vision would not be limited to <strong>the</strong> world <strong>of</strong> <strong>the</strong> Members but would be<br />
extended outward as well to <strong>the</strong> non-Member world and its energy problems.<br />
<strong>The</strong>se objectives were achieved in part by <strong>the</strong> <strong>IEA</strong> formal structure at <strong>the</strong><br />
outset. Since <strong>1974</strong>, moreover, <strong>the</strong> policy outlooks and forthcoming spirit <strong>of</strong><br />
<strong>the</strong> Member countries, <strong>of</strong> <strong>the</strong>ir representatives working with <strong>the</strong> Agency and<br />
<strong>of</strong> Secretariat members have also played an essential role in integrating all <strong>of</strong><br />
<strong>the</strong> critical elements into a coherent organizational system.<br />
This <strong>History</strong> <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s first twenty years brings toge<strong>the</strong>r an account<br />
<strong>of</strong> both <strong>the</strong> origins <strong>of</strong> <strong>the</strong> Agency and its institutional structure. <strong>The</strong> events<br />
discussed briefly above are recounted in Chapter II, while <strong>the</strong> structure and<br />
institutional developments are discussed in Chapters III to VIII inclusive.<br />
Chapter II looks at <strong>the</strong> problems leading to <strong>the</strong> energy crisis at <strong>the</strong> time <strong>of</strong><br />
<strong>the</strong> Middle East War, <strong>the</strong> lessons industrial countries learned in 1973-<strong>1974</strong><br />
and <strong>the</strong> resulting reassessment <strong>of</strong> <strong>the</strong>ir energy situation. <strong>The</strong>re follows a<br />
narrative <strong>of</strong> <strong>the</strong> early diplomatic efforts to bring <strong>the</strong> leading industrial<br />
countries toge<strong>the</strong>r and to obtain <strong>the</strong> desired organizational outcomes.<br />
Chapter III looks at treaty and procedural questions which give force to <strong>the</strong><br />
I.E.P. Agreement and to Agency structures and actions. <strong>IEA</strong> relationships<br />
come under scrutiny in Chapter IV, particularly Membership questions, <strong>the</strong><br />
obligations <strong>of</strong> Members (to <strong>the</strong> Agency and to each o<strong>the</strong>r), <strong>the</strong> important<br />
22
autonomy <strong>of</strong> <strong>the</strong> <strong>IEA</strong> in its extensive relations with <strong>the</strong> OECD and<br />
competence <strong>of</strong> <strong>the</strong> Agency in external relations. Chapter V describes and<br />
analyzes <strong>the</strong> functions, powers, composition and procedures <strong>of</strong> <strong>the</strong><br />
Governing Board, which is <strong>the</strong> <strong>IEA</strong> organ holding <strong>the</strong> supreme power in <strong>the</strong><br />
Agency, and <strong>of</strong> <strong>the</strong> Standing Groups and Committees. Chapter VI considers<br />
<strong>the</strong> <strong>IEA</strong> Secretariat’s functions and responsibilities, including <strong>the</strong> special<br />
responsibilities for <strong>the</strong> operation <strong>of</strong> <strong>the</strong> Emergency Sharing System, not<br />
usually assigned to <strong>the</strong> Secretariats in o<strong>the</strong>r international organizations. In<br />
Chapter VII is found <strong>the</strong> history and description <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s vitally<br />
important Programmes <strong>of</strong> Work, Budgets and financing. Finally, Chapter<br />
VIII on “General Principles <strong>of</strong> <strong>the</strong> Agency” looks at <strong>the</strong> history <strong>of</strong> <strong>the</strong><br />
leading generalized or “horizontal” policies and practices which have<br />
shaped <strong>the</strong> Agency’s work in all sectors since <strong>1974</strong>. <strong>The</strong> “operating<br />
efficiency” objective developed at <strong>the</strong> Governing Board’s first meeting<br />
permeates <strong>IEA</strong> activities and deserves recognition as one <strong>the</strong> key elements in<br />
its success. Security, languages and documents, reviewed in Chapter VIII,<br />
have also had significant and evolving roles to play in <strong>the</strong> history <strong>of</strong> <strong>the</strong><br />
Agency. This <strong>Vol</strong>ume ends with Appendices in which are found: a list <strong>of</strong><br />
<strong>IEA</strong> Members with <strong>the</strong> dates <strong>of</strong> membership actions for each (Appendix I),<br />
lists <strong>of</strong> <strong>the</strong> individuals who have served as <strong>of</strong>ficers <strong>of</strong> Governing Board and<br />
o<strong>the</strong>r <strong>IEA</strong> organs since <strong>1974</strong> (Appendix II), <strong>the</strong> full texts <strong>of</strong> <strong>the</strong> I.E.P<br />
Agreement (Appendix III) and <strong>of</strong> <strong>the</strong> OECD Council Decision on <strong>the</strong><br />
Establishment <strong>of</strong> <strong>the</strong> Agency (Appendix IV), <strong>the</strong> organization <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
Secretariat (Appendix V), and highlights <strong>of</strong> principal <strong>IEA</strong> events <strong>1974</strong>-<br />
1993 (Appendix VI).<br />
<strong>Vol</strong>ume II will enlarge upon this institutional background in<br />
recounting <strong>the</strong> history <strong>of</strong> <strong>IEA</strong> policies and actions, many <strong>of</strong> which are<br />
referred to in <strong>Vol</strong>ume I as elements incidental to more institutional<br />
considerations. In <strong>Vol</strong>ume III most <strong>of</strong> <strong>the</strong> key documents discussed in <strong>the</strong><br />
first two <strong>Vol</strong>umes will be reproduced for convenient reference.<br />
<strong>The</strong> foregoing summary has surely alerted <strong>the</strong> reader to <strong>the</strong> fact that<br />
this institutional history is not intended to provide simply a traditional<br />
narrative <strong>of</strong> leading or interesting <strong>IEA</strong> events, although <strong>the</strong>re are necessarily<br />
elements <strong>of</strong> narrative in <strong>the</strong> pages that follow. Ra<strong>the</strong>r, <strong>the</strong> purpose <strong>of</strong> this<br />
<strong>Vol</strong>ume I is to present in some detail <strong>the</strong> reasons <strong>the</strong> founders created <strong>the</strong><br />
<strong>IEA</strong>, <strong>the</strong> significance <strong>of</strong> <strong>the</strong>ir institutional choices and <strong>the</strong> building blocks <strong>of</strong><br />
<strong>the</strong> structure <strong>the</strong>y put in place and operated successfully over <strong>the</strong> Agency’s<br />
first twenty years.<br />
<strong>The</strong> author’s intention is to describe and analyze <strong>the</strong> <strong>IEA</strong>’s historical<br />
foundations, particularly for Agency constituents, for governments, <strong>the</strong>ir<br />
23
<strong>of</strong>ficers, energy co-operation planners and builders, for scholars and o<strong>the</strong>rs<br />
who concern <strong>the</strong>mselves with international co-operation in energy or in<br />
o<strong>the</strong>r domains, and for those who might do so one day in <strong>the</strong> future. In<br />
this, <strong>the</strong> author permits himself <strong>the</strong> assumption that historical works <strong>of</strong> this<br />
kind will advance <strong>the</strong> cause <strong>of</strong> co-operation <strong>of</strong> governments in conducting<br />
<strong>the</strong>ir relations with each o<strong>the</strong>r in a world system that is too limited in<br />
resources, too fragile in structure and too hazardous overall for those<br />
relations to be left to <strong>the</strong> individual circumstances <strong>of</strong> each government’s<br />
independent actions.<br />
Throughout <strong>the</strong> description and analysis <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s origins and<br />
structure, this <strong>History</strong> will reflect <strong>the</strong> spirit in which <strong>the</strong> Agency was created<br />
and developed over its first twenty years. Embarking upon <strong>the</strong> ambitious<br />
International Energy Program described in this book represented a major<br />
act <strong>of</strong> faith <strong>of</strong> <strong>the</strong> Member governments. <strong>The</strong> establishment and successful<br />
operation <strong>of</strong> <strong>the</strong> Agency since <strong>1974</strong> demonstrated <strong>the</strong> enormous political<br />
will necessary to prevail over competing pressures and objectives and to<br />
overcome organizational inertia and <strong>the</strong> normal start-up difficulties <strong>of</strong> any<br />
international institution. <strong>The</strong> creation <strong>of</strong> <strong>the</strong> Agency demonstrated that a<br />
group <strong>of</strong> like-minded governments facing an adverse and deteriorating<br />
economic situation like oil import vulnerability is capable <strong>of</strong> responding<br />
constructively when <strong>the</strong> group identifies its mutual interests, establishes its<br />
group cohesion, and seizes <strong>the</strong> opportunity to build a sound and stable<br />
institutional mechanism for <strong>the</strong> achievement <strong>of</strong> common objectives.<br />
<strong>The</strong> success <strong>of</strong> <strong>the</strong> <strong>IEA</strong> was made possible by an essentially optimistic<br />
judgement that constructive co-operation in a coherent institutional setting<br />
provides <strong>the</strong> best means for tackling serious multinational problems,<br />
particularly in view <strong>of</strong> <strong>the</strong> disagreeable alternatives that might have to be<br />
faced. That optimistic spirit, it will be seen in this <strong>History</strong>, has continued to<br />
guide and shape <strong>the</strong> work <strong>of</strong> <strong>the</strong> Agency. It may be hoped that <strong>the</strong><br />
successful institutional effort to establish and develop <strong>the</strong> <strong>IEA</strong> over <strong>the</strong> past<br />
twenty years will not be far out <strong>of</strong> sight and influence when international<br />
relations again give rise to sudden and apparently intractable problems in<br />
<strong>the</strong> future.<br />
In <strong>the</strong> research, writing and production <strong>of</strong> this <strong>History</strong>, <strong>the</strong> author has<br />
been greatly aided by <strong>the</strong> interest, support and assistance <strong>of</strong> a large number<br />
<strong>of</strong> people. Executive Director Helga Steeg initiated <strong>the</strong> <strong>IEA</strong> history project<br />
24
and guided it personally as <strong>the</strong> work progressed. Her support, insights and<br />
wise judgements were invaluable, as were those <strong>of</strong> her Deputy, John P.<br />
Ferriter. Craig Bamberger, my successor as <strong>IEA</strong> chief Legal Counsel, read an<br />
early draft <strong>of</strong> <strong>the</strong> entire manuscript; his comments and suggestions were <strong>of</strong><br />
inestimable value. Natalie Newbern served admirably as research and<br />
editorial assistant; she prepared elements used in Appendix VI, <strong>the</strong><br />
“Highlights <strong>of</strong> Principal <strong>IEA</strong> Events <strong>1974</strong>-1993”, drawing upon <strong>the</strong> Annual<br />
Reports <strong>of</strong> <strong>the</strong> Governing Board to <strong>the</strong> OECD Council. Parts <strong>of</strong> early drafts<br />
<strong>of</strong> <strong>the</strong> <strong>History</strong> were read and commented upon, with great benefit to <strong>the</strong><br />
author, by <strong>The</strong>rese Bürger, Guy Caruso, Peter Huggins and Quincy<br />
Lumsden, all members <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Secretariat. Useful suggestions and<br />
information were also provided by Jasper Abramowski, Mario Barreto,<br />
Richard Dawson, Angela Dredden, Sergio Garribba, Roger Johnson,<br />
Stéphane De Loecker, Robert Ovart, Mieke Reece, Paul Sankey, Timothy<br />
Simmons, Robert Skinner, Lee Solsbery, Shane Streifel, James Tapper, Frank<br />
Tamburrano, Karen Treanton and Paul Vlaanderen <strong>of</strong> <strong>the</strong> Secretariat.<br />
Lorraine and Karen Scott suggested many improvements in <strong>the</strong> manuscript.<br />
In addition, I am indebted on <strong>the</strong> <strong>IEA</strong> production side to Sue Adams, Ian<br />
Denison, Françoise Full, Joyce Heard, Annette Leifeld and Michael Prange<br />
who helped transform <strong>the</strong> manuscript into a book. Computer expertise was<br />
ably brought to bear by Jim Murphy, Greg Prowse, Claudie Brinkmeijer,<br />
Angela Gazar and Bertrand Sadin <strong>of</strong> <strong>the</strong> Secretariat, and by Jack Phipps and<br />
Warren Waters. Many o<strong>the</strong>r colleagues provided logistical and o<strong>the</strong>r valuable<br />
support, including: Barbara Avrillon, Gladys Boisard-Findlay, Faye Bouré,<br />
Shirley Burnett, Gwyn Darling, Marilyn Ferris, Linden Ford, Amanda<br />
Hansen, Lynette Rogers-Goderum, Mary Harries-White, Barbara Jacob, Joaõ<br />
Lopes-Viegas, Margaret Jones, Kate Kelly, Gillian Laing-Balitrand, Maggy<br />
Madden, Anne Mayne, Sandra Mooney, Jean-Louis Mourao, Anke Mungen,<br />
Aideen Neville, Roisin O’Connell, Olivier Parada, Audrey Power, Elisabeth<br />
Young, Sarah Watkins-Roddy and Ca<strong>the</strong>rine Wynaendts. I wish also to<br />
express my gratitude for <strong>the</strong> assistance <strong>of</strong> <strong>the</strong> reference service staffs <strong>of</strong> <strong>the</strong><br />
United Nations Information Centre in Paris and <strong>the</strong> University <strong>of</strong> San Diego<br />
Law School Library in San Diego, California.<br />
This work simply could not have been brought to completion without<br />
<strong>the</strong> contributions mentioned above. Never<strong>the</strong>less, it goes without saying<br />
that <strong>the</strong> author remains solely responsible for any errors <strong>of</strong> omission or<br />
commission, <strong>of</strong> fact or <strong>of</strong> judgement, which might have found <strong>the</strong>ir way into<br />
<strong>the</strong> text.<br />
25
CHAPTER II<br />
ORIGINS OF THE <strong>IEA</strong><br />
A. Economic and Political Origins:<br />
Crisis <strong>of</strong> 1973-<strong>1974</strong><br />
1. Events Leading Up to <strong>the</strong> <strong>IEA</strong><br />
<strong>The</strong> International Energy Agency came into being in <strong>1974</strong> in response to<br />
<strong>the</strong> need for <strong>the</strong> major energy consuming countries to co-operate effectively<br />
on a broad spectrum <strong>of</strong> energy policies and most urgently on security <strong>of</strong> oil<br />
supply. <strong>The</strong> origins <strong>of</strong> <strong>the</strong> Agency may be found in <strong>the</strong> fundamental<br />
changes in economics and politics associated with <strong>the</strong> international oil<br />
market during <strong>the</strong> period leading up to <strong>the</strong> Middle East War crisis <strong>of</strong> 1973-<br />
<strong>1974</strong> and <strong>the</strong> industrial countries’ responses to those changes.<br />
<strong>The</strong> world oil market had been dominated for years by <strong>the</strong> major oil<br />
companies which enjoyed considerable power to influence prices paid to oil<br />
producers. During much <strong>of</strong> <strong>the</strong> decade preceding <strong>the</strong> crisis, an excess <strong>of</strong><br />
potential oil supply distributed among a number <strong>of</strong> producers led to<br />
downward pressure on <strong>the</strong> real prices paid for oil. When problems <strong>of</strong> short<br />
supply arose under those circumstances, <strong>the</strong>re remained sufficient capacity<br />
in <strong>the</strong> United States and elsewhere to provide a comfortable sense <strong>of</strong> oil<br />
security to industrialized countries in Europe and <strong>the</strong> Far East as well as in<br />
<strong>the</strong> United States.<br />
In <strong>the</strong> course <strong>of</strong> <strong>the</strong> late 1960s and early 1970s, however, this<br />
relatively stable oil supply situation eroded and <strong>the</strong>n disappeared, because<br />
<strong>the</strong> world relied excessively on this commodity. Excessive use <strong>of</strong> oil created<br />
<strong>the</strong> risks <strong>of</strong> a serious energy crisis and durable problems <strong>of</strong> energy supply<br />
management. Oil demand in <strong>the</strong> industrial countries increased dramatically<br />
through economic growth, but energy conservation measures were<br />
inadequate, and <strong>the</strong> development <strong>of</strong> alternative sources <strong>of</strong> energy was<br />
insufficient. Lower prices for oil had translated into reduced investment in<br />
<strong>the</strong> United States oil industry and a decline in production capacity.<br />
Incipient environmental constraints on <strong>the</strong> production <strong>of</strong> oil and o<strong>the</strong>r<br />
27
major energy sources also contributed to <strong>the</strong> tightening <strong>of</strong> <strong>the</strong> market.<br />
<strong>The</strong>se factors eventually transformed <strong>the</strong> traditional “buyers’ market” into<br />
a “sellers’ market” for oil. <strong>The</strong>re were also growing demands by <strong>the</strong> oil<br />
producer countries, grouped in <strong>the</strong> Organization <strong>of</strong> Petroleum Exporting<br />
Countries (OPEC), for greater participation in <strong>the</strong> control and benefits <strong>of</strong><br />
<strong>the</strong>ir indigenous oil wealth. This meant higher prices, with increased<br />
transfers <strong>of</strong> wealth from industrial countries to producers, inflation and<br />
strains on financial markets. Moreover, <strong>the</strong> additional oil which would be<br />
required would have to be provided largely by sources outside <strong>of</strong> <strong>the</strong><br />
industrial countries and particularly by Middle Eastern suppliers. Under<br />
<strong>the</strong>se circumstances it could not be excluded that <strong>the</strong> oil producing<br />
countries might also find that <strong>the</strong>ir oil wealth, <strong>the</strong>n rapidly increasing in<br />
value, could be employed not only to greater economic advantage, but also<br />
as a weapon to obtain political objectives in wholly unrelated areas <strong>of</strong><br />
international relations. <strong>The</strong> stage was thus set for potentially far-reaching<br />
economic, political and social disruptions.<br />
<strong>The</strong> industrial countries’ worst fears were realized in <strong>the</strong> crisis <strong>of</strong><br />
1973-<strong>1974</strong> when a number <strong>of</strong> <strong>the</strong> Members <strong>of</strong> <strong>the</strong> Organization <strong>of</strong> Arab<br />
Petroleum Exporting Countries (OAPEC) took concerted action, beginning<br />
in October 1973, to reduce <strong>the</strong>ir previous oil production from about<br />
<strong>20</strong>.8 million barrels per day (mbd) to about 15.8 mbd. <strong>The</strong>se reductions<br />
were set to increase in monthly increments, until <strong>the</strong>ir economic and<br />
political objectives were achieved, and <strong>the</strong>y were sufficiently implemented<br />
to increase oil prices dramatically, in some spot transactions by as much as<br />
six-fold. <strong>The</strong> producers were able to fix prices in <strong>the</strong> range <strong>of</strong> 400 per cent<br />
above previous levels, bringing about a number <strong>of</strong> <strong>the</strong> economic<br />
consequences referred to above. <strong>The</strong> disappearance <strong>of</strong> sufficient spare<br />
capacity in non-OAPEC countries meant that <strong>the</strong> production cuts would<br />
indeed disrupt <strong>the</strong> industrial countries’ essential oil supplies and that little<br />
could be done in <strong>the</strong> short-run to reduce <strong>the</strong> price spike.<br />
<strong>The</strong> political impact <strong>of</strong> <strong>the</strong> changes in market conditions was seen<br />
most vividly in <strong>the</strong> Arab producers’ use <strong>of</strong> <strong>the</strong> “oil weapon” in an embargo<br />
intended to induce policy changes in <strong>the</strong> target countries with respect to<br />
Israel. <strong>The</strong> embargo was established by <strong>the</strong> selective delivery <strong>of</strong> available<br />
oil and by <strong>the</strong> deliberate production cuts. So-called “friendly countries”<br />
would continue to receive <strong>the</strong>ir previous levels <strong>of</strong> supply without<br />
disturbance. Although <strong>the</strong> embargo was not uniformly applied, Saudi<br />
Arabia and Libya cut <strong>of</strong>f virtually all supplies to <strong>the</strong> United States, which<br />
<strong>the</strong>y viewed as <strong>the</strong> principal adversary. Denmark, <strong>The</strong> Ne<strong>the</strong>rlands,<br />
Portugal, Rhodesia and South Africa were also embargo targets.<br />
28
<strong>The</strong> immediate supply disruption had to be managed by <strong>the</strong> oil<br />
industry and industrial country governments as best <strong>the</strong>y could under <strong>the</strong><br />
circumstances. <strong>The</strong> oil companies scrambled to adjust available supplies<br />
when possible, but <strong>the</strong>y were hampered by insufficient market information,<br />
organizational weaknesses and <strong>the</strong> political difficulties <strong>of</strong> taking <strong>the</strong><br />
allocation decisions. On a pragmatic and imperfect basis, companies could<br />
pro rate <strong>the</strong> available supply among <strong>the</strong>ir affiliates and customers on <strong>the</strong><br />
basis <strong>of</strong> actual or forecast oil consumption, a task that was not made easier<br />
by <strong>the</strong>ir resulting political exposure in both producer and industrial<br />
countries. While decisions <strong>of</strong> that kind would normally have been taken by<br />
governments, in this case governments were unprepared to cope with <strong>the</strong><br />
mix <strong>of</strong> economic and political questions. Like <strong>the</strong> oil companies,<br />
governments suffered from insufficient information and organizational<br />
weakness, but <strong>the</strong>y also faced political difficulties arising from conflicting<br />
national perceptions and objectives which prevented <strong>the</strong>m from acting<br />
toge<strong>the</strong>r as a group to meet <strong>the</strong> common crisis.<br />
<strong>The</strong>se events brought home to policy makers in <strong>the</strong> industrialized<br />
countries <strong>the</strong> extent <strong>of</strong> <strong>the</strong>ir oil import dependence and vulnerability, both<br />
in <strong>the</strong> threat <strong>of</strong> economic losses and in <strong>the</strong> political pressures arising in <strong>the</strong><br />
course <strong>of</strong> threatened or actual oil supply cuts or “accidental” disruptions<br />
stemming from natural or o<strong>the</strong>r causes. In sum, <strong>the</strong> industrial countries<br />
had to face up to <strong>the</strong> fact <strong>of</strong> <strong>the</strong>ir having little or no control over one <strong>of</strong> <strong>the</strong><br />
vital commodities employed in <strong>the</strong>ir advanced economies and to <strong>the</strong>ir<br />
having made inadequate preparations for taking collective measures to<br />
manage <strong>the</strong> consequential economic and political vulnerability.<br />
It was soon apparent to consumer governments that <strong>the</strong> resounding<br />
success <strong>of</strong> <strong>the</strong> oil producers during <strong>the</strong> 1973-<strong>1974</strong> crisis could not be<br />
ignored and that energy policy issues could not be left to <strong>the</strong> oil companies<br />
or be addressed effectively by individual countries acting alone. International<br />
co-operation through permanent institutions would be necessary to<br />
meet <strong>the</strong> new challenges. <strong>The</strong> industrial countries’ response would need to<br />
take full cognizance <strong>of</strong> <strong>the</strong> fact that <strong>the</strong> oil producers’ successes resulted<br />
from <strong>the</strong>ir concerted action based upon <strong>the</strong>ir newly achieved economic<br />
power and that <strong>the</strong> producers’ future energy policies would doubtless be<br />
developed and applied within <strong>the</strong> context <strong>of</strong> established institutional<br />
mechanisms for international co-operation, and particularly in OPEC.<br />
Hence <strong>the</strong> industrial countries took a fresh look at <strong>the</strong> <strong>the</strong>n existing<br />
institutional basis for <strong>the</strong>ir own co-operation on energy policy questions,<br />
especially <strong>the</strong> OECD, only to find that institutional base to be wholly<br />
inadequate for <strong>the</strong> management <strong>of</strong> <strong>the</strong> risks <strong>of</strong> more troublesome hardships<br />
29
in <strong>the</strong> future. <strong>The</strong>y would have to seek a more suitable mechanism for<br />
establishing <strong>the</strong>ir solidarity and for sharing <strong>the</strong> burdens <strong>of</strong> hardships to<br />
come.<br />
<strong>The</strong> foregoing historical background is fur<strong>the</strong>r developed in Ulf<br />
Lantzke, “<strong>The</strong> OECD and its International Energy Agency”, Daedalus,<br />
vol.104, p. 217 (Fall 1975); “<strong>The</strong> Oil Crisis: in Perspective”, Daedalus, vol.<br />
104; Daniel Yergin, <strong>The</strong> Prize, Chs. 28-31 and sources cited in Yergin. <strong>The</strong><br />
story <strong>of</strong> <strong>the</strong>se events must now turn to <strong>the</strong> more specific institutional<br />
aspects, first to <strong>the</strong> oil producer’s organization, which seemed so successful<br />
in 1973-<strong>1974</strong>, and <strong>the</strong>n to <strong>the</strong> industrial countries’ co-operation in OECD,<br />
which was found to be wanting, before moving to <strong>the</strong> industrial countries’<br />
responses and <strong>the</strong> new institutions which are <strong>the</strong> main subject <strong>of</strong> this<br />
<strong>History</strong>.<br />
2. Producer Countries’ Organization<br />
While <strong>the</strong> industrial countries were imperfectly organized to deal with a<br />
crisis <strong>of</strong> <strong>the</strong> magnitude <strong>of</strong> <strong>the</strong> 1973-<strong>1974</strong> events, as will be seen in Section 3<br />
below, <strong>the</strong> oil producers were much more effectively prepared, largely<br />
because <strong>of</strong> <strong>the</strong>ir perceived need to deal on a concerted basis initially with<br />
<strong>the</strong> major oil companies. <strong>The</strong> oil producers found that <strong>the</strong>y required<br />
organized co-operation in order to obtain <strong>the</strong>ir objectives in <strong>the</strong> market,<br />
objectives which <strong>the</strong>y believed <strong>the</strong>y could not achieve individually vis-à-vis<br />
<strong>the</strong> international oil companies. Pricing and o<strong>the</strong>r problems arising in <strong>the</strong><br />
late 1950s induced <strong>the</strong>m to seek a basis for joint action in order to<br />
streng<strong>the</strong>n <strong>the</strong>ir negotiating position with <strong>the</strong> companies. In place <strong>of</strong><br />
individual government action, which had previously suffered from ad hoc,<br />
incomplete, and ineffective measures <strong>of</strong> co-operation, <strong>the</strong> producer group<br />
sought to solve <strong>the</strong>se problems by utilizing <strong>the</strong> public international law<br />
institutions <strong>of</strong> diplomacy and international organization to increase <strong>the</strong>ir<br />
individual economic and political power. <strong>The</strong> producer countries’ effective<br />
power potential would rise in <strong>the</strong> aggregate, and <strong>the</strong>y accordingly sought<br />
<strong>the</strong> requisite grouping through formal international organization. As will be<br />
seen below in Section B, <strong>the</strong>se lessons <strong>of</strong> co-operation would in turn become<br />
well understood by <strong>the</strong> industrial countries as <strong>the</strong>y assessed <strong>the</strong> institutional<br />
aspects <strong>of</strong> <strong>the</strong> 1973-<strong>1974</strong> crisis.<br />
OPEC <strong>of</strong> course came much earlier. Following initiatives <strong>of</strong> Venezuela,<br />
<strong>the</strong> government <strong>of</strong> Iraq convened <strong>the</strong> Conference <strong>of</strong> <strong>the</strong> Exporting Countries<br />
at Baghdad from 10-14 September 1960 to seek a co-operative solution to<br />
<strong>the</strong> oil producer problems. <strong>The</strong> Conference brought toge<strong>the</strong>r in a traditional<br />
30
diplomatic forum <strong>the</strong> representatives <strong>of</strong> <strong>the</strong> Governments <strong>of</strong> Iran, Iraq,<br />
Kuwait, Saudi Arabia and Venezuela, <strong>the</strong> countries which became <strong>the</strong> five<br />
founding Members <strong>of</strong> OPEC, later joined by o<strong>the</strong>rs to make a total <strong>of</strong><br />
thirteen Members (now twelve). <strong>The</strong> main outcome <strong>of</strong> <strong>the</strong> Conference was<br />
<strong>the</strong> adoption <strong>of</strong> three resolutions which, when later approved by <strong>the</strong><br />
appropriate authorities <strong>of</strong> each Member, formed <strong>the</strong> “Agreement Concerning<br />
<strong>the</strong> Creation <strong>of</strong> <strong>the</strong> Organization <strong>of</strong> Petroleum Exporting Countries”<br />
[U.N.T.S. <strong>Vol</strong>. 443, p. 248]. That Agreement recites <strong>the</strong> considerations<br />
which led <strong>the</strong> Members to act, describes <strong>the</strong> immediate co-operative action to<br />
be taken, and sets forth <strong>the</strong> rudiments <strong>of</strong> <strong>the</strong> international organization<br />
which came to be known as OPEC. Stating <strong>the</strong> Members’ action in <strong>the</strong><br />
simple but logical form <strong>of</strong> conference resolutions, <strong>the</strong> Agreement provided<br />
<strong>the</strong> basic legal framework <strong>of</strong> OPEC.<br />
<strong>The</strong> considerations which led to <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> OPEC Conference<br />
Resolutions show clearly that at <strong>the</strong> outset <strong>the</strong> OPEC Agreement was directed<br />
principally toward achieving higher petroleum prices. <strong>The</strong> Resolutions refer<br />
to <strong>the</strong> importance <strong>of</strong> petroleum export income to financing development<br />
programmes and to balancing <strong>the</strong> Members’ annual national budgets. <strong>The</strong>y<br />
also state that petroleum is a “wasting asset and to <strong>the</strong> extent that it is<br />
depleted must be replaced by o<strong>the</strong>r assets”. After acknowledging <strong>the</strong> worldwide<br />
reliance on petroleum as a primary source <strong>of</strong> energy generation, <strong>the</strong><br />
preamble concludes “that any fluctuation in <strong>the</strong> price <strong>of</strong> petroleum<br />
necessarily affects <strong>the</strong> implementation <strong>of</strong> <strong>the</strong> Members’ programmes, and<br />
results in a dislocation detrimental not only to <strong>the</strong>ir own economies, but also<br />
to those <strong>of</strong> all consumer nations”. <strong>The</strong> resolutions provided that <strong>the</strong><br />
principal aim <strong>of</strong> <strong>the</strong> Organization “shall be <strong>the</strong> unification <strong>of</strong> petroleum<br />
policies for <strong>the</strong> Member Countries and <strong>the</strong> determination <strong>of</strong> <strong>the</strong> best means<br />
for safeguarding <strong>the</strong> interests <strong>of</strong> Member Countries individually and<br />
collectively”. While <strong>the</strong> initial statements <strong>of</strong> OPEC commitments were<br />
essentially defensive in character (to protect <strong>the</strong>mselves vis-à-vis <strong>the</strong> major<br />
oil companies), <strong>the</strong> organization which was called into being at Baghdad was<br />
fully capable <strong>of</strong> carrying out <strong>of</strong>fensive as well as defensive measures when<br />
market or political opportunities presented <strong>the</strong>mselves.<br />
In <strong>the</strong> industrial countries, ever-increasing demand for oil in <strong>the</strong><br />
1960s, as seen above, led to corresponding increases in oil imports and<br />
dependency <strong>of</strong> <strong>the</strong> United States, Western Europe and Japan on OPEC oil.<br />
During <strong>the</strong> 1960s, OPEC was only modestly successful in influencing oil<br />
prices, which remained relatively stable in absolute terms. Low prices<br />
brought about increased demand which in turn increased <strong>the</strong> market power<br />
<strong>of</strong> <strong>the</strong> low cost producers in <strong>the</strong> Middle East and in Venezuela. <strong>The</strong> OPEC<br />
31
countries used this period to build up gradually a sense <strong>of</strong> community<br />
interest and awareness <strong>of</strong> <strong>the</strong> need for co-operative action. <strong>The</strong>y provided<br />
training opportunities for government experts in OPEC, carried out joint<br />
research and economic preparations, prepared for a more favorable time in<br />
<strong>the</strong> future to act, and slowly built up pressure on consumers as market<br />
conditions changed. <strong>The</strong> risks <strong>of</strong> growing vulnerability were thus fully<br />
visible to <strong>the</strong> discerning eye.<br />
<strong>The</strong> combined effect <strong>of</strong> tightening market conditions and <strong>the</strong><br />
existence <strong>of</strong> a co-operative organization in <strong>the</strong> late 1960s enabled <strong>the</strong> OPEC<br />
countries to wrest power over prices from <strong>the</strong> oil companies. During <strong>the</strong><br />
period <strong>of</strong> 1969-1972, OPEC countries began setting prices without<br />
negotiation with <strong>the</strong> oil companies. With oil production cuts over a few<br />
months <strong>of</strong> <strong>the</strong> 1973-<strong>1974</strong> crisis, a $2.59 per barrel marker price was raised<br />
to $11.65, effective 1 January <strong>1974</strong>. <strong>The</strong> oil producers also discovered <strong>the</strong><br />
political utility <strong>of</strong> <strong>the</strong> “oil weapon”. <strong>The</strong> oil embargo employed during <strong>the</strong><br />
1973 Middle East War against Denmark, <strong>The</strong> Ne<strong>the</strong>rlands, Portugal,<br />
Rhodesia, South Africa and <strong>the</strong> United States by <strong>the</strong> Arab oil producers<br />
demonstrated to <strong>the</strong> producer countries <strong>the</strong>ir new potential for <strong>the</strong> exercise<br />
<strong>of</strong> political power, even in <strong>the</strong> absence <strong>of</strong> a specific OPEC mandate for <strong>the</strong><br />
exercise <strong>of</strong> political power. Although <strong>the</strong> 1973-<strong>1974</strong> embargo was not<br />
imposed by OPEC itself, but ra<strong>the</strong>r by <strong>the</strong> Arab oil producer Members <strong>of</strong><br />
OAPEC (which included such non-OPEC countries as Egypt and Syria),<br />
OPEC emerged from <strong>the</strong> crisis as <strong>the</strong> key producer organization with cartellike<br />
powers over <strong>the</strong> production and pricing <strong>of</strong> oil in <strong>the</strong> world market and<br />
thus became <strong>the</strong> potential force <strong>the</strong> industrial countries would have to<br />
contend with in future years.<br />
This swift and extraordinary increase in power <strong>of</strong> <strong>the</strong> oil producers<br />
was made possible by <strong>the</strong> existence <strong>of</strong> OPEC, which <strong>the</strong>n appeared to have<br />
become one <strong>of</strong> <strong>the</strong> most dramatically successful international organizations<br />
in <strong>the</strong> briefest period <strong>of</strong> time. Fur<strong>the</strong>rmore, <strong>the</strong> industrial countries could<br />
reasonably expect more difficulties to come. As a permanent organization<br />
rapidly advancing to meet its aims, OPEC was seen as standing ready, with<br />
well-developed economic and political resolve, to act in <strong>the</strong> future on behalf<br />
<strong>of</strong> producer countries. Although <strong>the</strong> producers’ powers were partially<br />
produced by <strong>the</strong> effects <strong>of</strong> external events ra<strong>the</strong>r than <strong>the</strong> systematic<br />
exercise <strong>of</strong> cartel powers, and although OPEC’s later influence on prices was<br />
not always so dramatic, <strong>the</strong> organizational lessons <strong>of</strong> <strong>the</strong> 1973-<strong>1974</strong> crisis<br />
led <strong>the</strong> industrial countries to reassess <strong>the</strong>ir organizational arrangements<br />
which had been in place during <strong>the</strong> crisis. This is <strong>the</strong> subject <strong>of</strong> Section 3<br />
which follows.<br />
32
3. Industrial Countries’ Institutional Arrangements<br />
While <strong>the</strong> key oil producers were able to act coherently in <strong>the</strong> 1973-<strong>1974</strong><br />
crisis because <strong>of</strong> <strong>the</strong> institutional arrangements <strong>the</strong>y had made in OPEC<br />
(See Section A-2 above), <strong>the</strong> industrial countries appeared at that time to be<br />
in organizational disarray, unable to act in a unified fashion. <strong>The</strong> policy<br />
differences which divided <strong>the</strong> industrial countries and <strong>the</strong> temptations <strong>of</strong><br />
each to go its own way in pursuit <strong>of</strong> its interests, without full regard for <strong>the</strong><br />
situations <strong>of</strong> o<strong>the</strong>rs, could not be overcome through <strong>the</strong>ir existing forms <strong>of</strong><br />
international co-operation. Although <strong>the</strong> principal industrial countries were<br />
grouped toge<strong>the</strong>r in <strong>the</strong> OECD, that Organisation was not at that time<br />
equipped to deal promptly with <strong>the</strong> types <strong>of</strong> problems presented by <strong>the</strong><br />
crisis. Later, however, OECD was to provide <strong>the</strong> framework for <strong>the</strong><br />
establishment <strong>of</strong> <strong>the</strong> International Energy Agency, which was specifically<br />
designed to meet <strong>the</strong> industrial countries’ energy organization needs. To<br />
understand why this came about, it is necessary to examine some <strong>of</strong> <strong>the</strong><br />
main institutional structures which determined <strong>the</strong> roles OECD could and<br />
could not play in <strong>the</strong> crisis.<br />
<strong>The</strong> OECD evolved in 1961 out <strong>of</strong> <strong>the</strong> Organisation for European<br />
Economic Co-operation (OEEC), which initially had been established by<br />
Western European countries to co-ordinate Marshall Plan aid to Europe<br />
following World War II. Reconstituted as <strong>the</strong> OECD, <strong>the</strong> Organisation’s<br />
membership expanded to include <strong>the</strong> United States and Canada, and <strong>the</strong><br />
Organisation’s character changed from a regional to a broader functional<br />
organization <strong>of</strong> <strong>the</strong> developed market economy democracies.<br />
At <strong>the</strong> time <strong>of</strong> <strong>the</strong> 1973-<strong>1974</strong> crisis, <strong>the</strong> OECD was <strong>the</strong> principal<br />
economic organization <strong>of</strong> <strong>the</strong> industrialized market economy countries <strong>of</strong><br />
Europe, North America and Asia (by that time Australia, Japan and New<br />
Zealand had also become Members). <strong>The</strong> responsibility <strong>of</strong> <strong>the</strong> OECD<br />
extended to virtually all economic questions which its Members wished <strong>the</strong><br />
Organisation to consider, including such important sectors as <strong>the</strong><br />
development <strong>of</strong> its Member countries’ economies, <strong>the</strong> expansion <strong>of</strong> world<br />
trade, and <strong>the</strong> progress <strong>of</strong> developing countries. Energy questions, <strong>of</strong><br />
course, fell clearly within <strong>the</strong> Organisation’s mandate. Although at that<br />
time <strong>the</strong> OECD was not particularly considered to be <strong>the</strong> international<br />
organization <strong>of</strong> high energy consumer governments, it was indeed <strong>the</strong> forum<br />
in which those governments carried out economic co-operation under <strong>the</strong><br />
most auspicious institutional conditions <strong>the</strong>n available to <strong>the</strong>m.<br />
<strong>The</strong> OECD’s principal functions were directed to policy development<br />
and promotion, as well as consultation and co-operation in <strong>the</strong> areas <strong>of</strong> <strong>the</strong><br />
Organisation’s economic mandate. Members had undertaken institutional<br />
33
obligations in Article 3(a) <strong>of</strong> <strong>the</strong> OECD Convention to “keep each o<strong>the</strong>r<br />
informed and furnish <strong>the</strong> Organisation with <strong>the</strong> information necessary for<br />
<strong>the</strong> accomplishment <strong>of</strong> its tasks”. Members also agreed in Article 3(b) to<br />
“consult toge<strong>the</strong>r on a continuing basis, carry out studies and participate in<br />
agreed projects” and in Article 3(c) to “co-operate closely and where<br />
appropriate take co-ordinated action”. <strong>The</strong> OECD was <strong>the</strong> forum in which<br />
economic policies could be developed on <strong>the</strong> basis <strong>of</strong> shared information,<br />
and in which matters <strong>of</strong> mutual concern to <strong>the</strong> Members could become <strong>the</strong><br />
subject <strong>of</strong> recommendations, decisions or o<strong>the</strong>r actions <strong>of</strong> <strong>the</strong> Council, <strong>the</strong><br />
supreme body <strong>of</strong> <strong>the</strong> Organisation. Unlike most contemporary international<br />
organizations, <strong>the</strong> OECD Council was empowered by Article 5(a) to “take<br />
decisions which, except as o<strong>the</strong>rwise provided, shall be binding on all <strong>the</strong><br />
Members”. That decision-making power was not limited to internal matters<br />
concerning <strong>the</strong> work <strong>of</strong> <strong>the</strong> OECD, but extended also to decisions on any<br />
matter falling within <strong>the</strong> broad competence <strong>of</strong> <strong>the</strong> Organisation. It is not<br />
surprising under <strong>the</strong>se circumstances that unanimity was <strong>the</strong> rule <strong>of</strong><br />
decision in <strong>the</strong> OECD Council. According to Article 6.1 “Unless <strong>the</strong><br />
Organisation o<strong>the</strong>rwise agrees unanimously for special cases, decisions shall<br />
be taken and recommendations shall be made by mutual agreement <strong>of</strong> all<br />
<strong>the</strong> Members”. Since each Member was entitled to be represented and had<br />
one vote in <strong>the</strong> OECD Council, <strong>the</strong> unanimity rule required in principle <strong>the</strong><br />
agreement <strong>of</strong> all twenty-four OECD Member countries. Although few<br />
exceptions to that rule had been made in <strong>the</strong> OECD before <strong>the</strong><br />
establishment <strong>of</strong> <strong>the</strong> International Energy Agency, unanimity in OECD had<br />
never required <strong>the</strong> affirmative vote <strong>of</strong> each Member. Article 6.2 <strong>of</strong> <strong>the</strong><br />
Convention recognized <strong>the</strong> right <strong>of</strong> abstention and provided that “such<br />
abstention shall not invalidate <strong>the</strong> decision or recommendation, which shall<br />
be applicable to <strong>the</strong> o<strong>the</strong>r Members but not to <strong>the</strong> abstaining Member”. As<br />
will be seen below, that provision played a key role in <strong>the</strong> establishment <strong>of</strong><br />
<strong>the</strong> International Energy Agency in <strong>the</strong> OECD. <strong>The</strong>n as now <strong>the</strong><br />
Organisation’s work was carried out by <strong>the</strong> Council, with co-ordination and<br />
general assistance <strong>of</strong> an Executive Committee and with <strong>the</strong> support <strong>of</strong> some<br />
twenty-five (now about thirty) functional Committees established by <strong>the</strong><br />
Council. Each <strong>of</strong> <strong>the</strong> Committees was given a specific mandate in <strong>the</strong> field<br />
<strong>of</strong> its main concern.<br />
<strong>The</strong> main OECD structure for dealing with energy questions at <strong>the</strong><br />
time <strong>of</strong> <strong>the</strong> 1973-<strong>1974</strong> crisis was composed <strong>of</strong> <strong>the</strong> Council, <strong>the</strong> Executive<br />
Committee and two functional bodies, <strong>the</strong> Oil Committee and <strong>the</strong> Energy<br />
Committee, which had been given general power to carry forward <strong>the</strong><br />
Organisation’s work in <strong>the</strong>ir respective fields. Well thought out for its<br />
34
assigned purposes, <strong>the</strong> foregoing OECD structure could not respond<br />
effectively in <strong>the</strong> 1973-<strong>1974</strong> crisis. Nei<strong>the</strong>r <strong>of</strong> those Committees was given<br />
<strong>the</strong> power <strong>of</strong> decision or competence to act directly upon Member countries’<br />
policies. <strong>The</strong> Committees’ principal functions were to prepare proposals for<br />
submission to <strong>the</strong> Council, which retained <strong>the</strong> sole power to act for <strong>the</strong><br />
Organisation in <strong>the</strong> field <strong>of</strong> energy. <strong>The</strong> Council could act only on <strong>the</strong> basis<br />
<strong>of</strong> unanimity <strong>of</strong> it Members, with each Member regardless <strong>of</strong> <strong>the</strong> size <strong>of</strong> its<br />
economy having one vote in <strong>the</strong> Council.<br />
In respect <strong>of</strong> oil, <strong>the</strong> OECD had adopted two legislative measures applicable<br />
only to <strong>the</strong> European Member countries <strong>of</strong> <strong>the</strong> Organisation. <strong>The</strong>se<br />
measures, held over from <strong>the</strong> OEEC, dealt with stockpiling and oil<br />
apportionment in an emergency. <strong>The</strong> OECD Oil Apportionment Decision<br />
[C(72)<strong>20</strong>1(Final)] adopted procedures to be carried out in <strong>the</strong> event <strong>of</strong> an oil<br />
supply emergency in Europe and encouraged European Member countries to<br />
prepare advance plans for carrying out reductions in consumption <strong>of</strong><br />
petroleum products. That Decision provided that if an oil supply emergency<br />
should arise or appear imminent, <strong>the</strong> Chairman <strong>of</strong> <strong>the</strong> OECD Oil Committee<br />
would consult <strong>the</strong> Secretary-General and convene <strong>the</strong> Oil Committee. <strong>The</strong><br />
Committee would prepare apportionment recommendations for <strong>the</strong> Council,<br />
which could by unanimous decision put into effect <strong>the</strong> emergency procedures<br />
provided in <strong>the</strong> Decision.<br />
Under <strong>the</strong> apportionment procedures, fuel (bunker) requirements for<br />
ocean-going vessels and air transport were to be met in full. Ninety percent<br />
<strong>of</strong> <strong>the</strong> remaining available oil supplies would be “automatically allocated to<br />
Member countries in <strong>the</strong> same proportion as each Member country’s normal<br />
consumption <strong>of</strong> <strong>the</strong> product to that <strong>of</strong> all <strong>the</strong> European Member countries”<br />
[C(72)<strong>20</strong>1(Final)]. <strong>The</strong> o<strong>the</strong>r ten per cent <strong>of</strong> supplies would be subject to<br />
special allocation to be decided by <strong>the</strong> Oil Committee in consideration <strong>of</strong><br />
serious economic difficulties. In making <strong>the</strong> special allocations, <strong>the</strong> Oil<br />
Committee would act by a two-third majority vote, subject to <strong>the</strong> right <strong>of</strong> a<br />
Member country to request <strong>the</strong> Council to review <strong>the</strong> decision, in which case<br />
unanimity would be required.<br />
According to <strong>the</strong> OECD Oil Apportionment Decision, when <strong>the</strong> Council<br />
decided that oil supplies should be apportioned, <strong>the</strong> International Industry<br />
Advisory Body (IIAB), consisting <strong>of</strong> fifteen oil companies would be activated<br />
to advise <strong>the</strong> Oil Committee on matters relating to <strong>the</strong> availability <strong>of</strong> oil for<br />
OECD Europe and to assist in <strong>the</strong> implementation <strong>of</strong> <strong>the</strong> Oil Committee’s<br />
recommendations for <strong>the</strong> apportionment <strong>of</strong> available oil supplies. <strong>The</strong> IIAB<br />
would assist <strong>the</strong> Oil Committee in assessing <strong>the</strong> overall deficit in supplies as<br />
compared with estimated consumption levels. Although <strong>the</strong> IIAB had<br />
35
emained on a standby basis since it was first convened in 1967, it did not<br />
meet during <strong>the</strong> 1973-<strong>1974</strong> crisis, as will be seen below.<br />
In addition to <strong>the</strong> Apportionment Decision, <strong>the</strong> OECD had in place in<br />
1973-<strong>1974</strong> an oil stockpiling measure containing a recommendation to <strong>the</strong><br />
governments <strong>of</strong> European Member countries “to achieve as soon as possible<br />
a stock level <strong>of</strong> at least 90 days average inland consumption <strong>of</strong> <strong>the</strong> previous<br />
calendar year” [C(71)113(Final)]. One <strong>of</strong> <strong>the</strong> important functions <strong>of</strong> <strong>the</strong><br />
Oil Committee was to review that recommendation and to report annually<br />
to <strong>the</strong> Council on <strong>the</strong> progress achieved in its implementation.<br />
Although <strong>the</strong> foregoing systems would be taken into account in <strong>the</strong><br />
later development <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, <strong>the</strong> major weaknesses in <strong>the</strong> systems were also<br />
manifest. Not only were OECD procedures encumbered by <strong>the</strong> requirement<br />
<strong>of</strong> unanimity, but also <strong>the</strong> OECD’s information systems were incompletely<br />
developed and that Organisation was not equipped with <strong>the</strong> support services<br />
necessary to mount a successful defensive operation in <strong>the</strong> event <strong>of</strong> an<br />
emergency. <strong>The</strong> Oil Apportionment Decision was only a first step in <strong>the</strong><br />
direction <strong>of</strong> effective defensive measures. It applied only to <strong>the</strong> European<br />
countries and was limited to <strong>the</strong> apportionment <strong>of</strong> products. In <strong>the</strong>se<br />
circumstances, <strong>the</strong>re seemed to be little chance that <strong>the</strong> OECD measures<br />
could play a significant role in an oil supply emergency.<br />
<strong>The</strong>se insufficiencies inherent in <strong>the</strong> OECD were, <strong>of</strong> course, known to<br />
<strong>the</strong> industrial countries, and efforts were being made to streng<strong>the</strong>n OECD<br />
co-operation. Consultations within <strong>the</strong> OECD took place in <strong>the</strong> summer <strong>of</strong><br />
1973 to associate <strong>the</strong> United States and Canada with <strong>the</strong> European<br />
countries in a new oil apportionment scheme. A number <strong>of</strong> meetings were<br />
held in an ad hoc group which was established by <strong>the</strong> OECD Oil Committee<br />
to develop an expanded apportionment system. <strong>The</strong>re were also informal<br />
discussions in <strong>the</strong> OECD Secretariat about <strong>the</strong> need to create a stronger<br />
institutional basis to manage a wider range <strong>of</strong> energy problems. However,<br />
this developmental work in <strong>the</strong> OECD was overtaken by <strong>the</strong> crisis in 1973-<br />
<strong>1974</strong> when <strong>the</strong> industrial countries’ attentions became sharply focused upon<br />
<strong>the</strong> crisis itself and <strong>the</strong>ir responses to <strong>the</strong> crisis as well as <strong>the</strong> institutional<br />
lessons <strong>the</strong>y drew from <strong>the</strong>ir not altoge<strong>the</strong>r satisfactory experiences in<br />
dealing with it.<br />
4. Industrial Countries’ Responses<br />
During <strong>the</strong> lead-up to <strong>the</strong> crisis and throughout <strong>the</strong> period <strong>of</strong> <strong>the</strong> crisis, <strong>the</strong>re<br />
was available to <strong>the</strong> industrial countries in effect only <strong>the</strong> institutional<br />
response mechanisms <strong>of</strong> <strong>the</strong> OECD, described briefly above. In order for co-<br />
36
operation efforts to be effective in such crisis situations, <strong>the</strong>re had to be a close<br />
convergence <strong>of</strong> <strong>the</strong> relevant policies <strong>of</strong> <strong>the</strong> OECD Members, strong political<br />
will among <strong>the</strong>m to act toge<strong>the</strong>r and firm judgment that <strong>the</strong> institutional<br />
arrangements in <strong>the</strong> OECD were <strong>the</strong>mselves sufficient and workable. None <strong>of</strong><br />
<strong>the</strong>se conditions was satisfied with respect ei<strong>the</strong>r to <strong>the</strong> Organisation’s formal<br />
oil measures or to its general institutional framework for co-operation.<br />
At <strong>the</strong> time <strong>of</strong> <strong>the</strong> crisis, OECD Europe’s oil stocks were below <strong>the</strong><br />
recommended ninety-day level, standing only at about a seventy day<br />
supply. This stock condition doubtless reduced <strong>the</strong> potential vulnerability<br />
<strong>of</strong> <strong>the</strong> consumers, but <strong>the</strong> failure to reach <strong>the</strong> ninety-day objective perhaps<br />
symbolized <strong>the</strong> incomplete state <strong>of</strong> <strong>the</strong>ir overall preparation for a significant<br />
oil supply emergency. <strong>The</strong>ir failure to co-ordinate <strong>the</strong> use <strong>of</strong> <strong>the</strong>ir stocks<br />
during <strong>the</strong> course <strong>of</strong> <strong>the</strong> crisis was a fur<strong>the</strong>r failure <strong>of</strong> organization which<br />
weakened <strong>the</strong>ir response.<br />
<strong>The</strong> OECD never invoked <strong>the</strong> European oil apportionment machinery<br />
which might have distributed <strong>the</strong> oil supply loss more equitably in Europe<br />
and could have been extended on an ad hoc basis to <strong>the</strong> United States,<br />
Canada, Japan and o<strong>the</strong>rs. Since <strong>the</strong> unanimous decision that was needed<br />
to implement apportionment could doubtless not be achieved, <strong>the</strong>re was no<br />
<strong>of</strong>ficial proposal to invoke <strong>the</strong> European apportionment system. <strong>The</strong><br />
underlying reasons for this failure have been stated effectively as follows:<br />
<strong>The</strong> scheme could not be activated, however, in part because<br />
trust in <strong>the</strong> flexibility <strong>of</strong> <strong>the</strong> oil market was too strong to achieve<br />
<strong>the</strong> unanimous agreement that was necessary. O<strong>the</strong>r<br />
considerations, such as a concern lest <strong>the</strong> oil exporters be<br />
<strong>of</strong>fended, may have added to <strong>the</strong> reluctance, but lack <strong>of</strong><br />
information must be regarded as <strong>the</strong> really decisive element<br />
[Ulf Lantzke, “<strong>The</strong> OECD and its International Energy<br />
Agency”, Daedalus, vol. 104, p. 217, 2<strong>20</strong> (Fall 1975)].<br />
It was perhaps unreasonable to expect that a rule <strong>of</strong> unanimity could<br />
operate effectively in <strong>the</strong> face <strong>of</strong> <strong>the</strong> divergent interests and policies <strong>of</strong> so<br />
many countries concerned with such a vital matter. <strong>The</strong> OECD emergency<br />
procedures thus could not provide a suitable basis for <strong>the</strong> industrial<br />
countries’ response to <strong>the</strong> 1973-<strong>1974</strong> crisis. <strong>The</strong> actual role which <strong>the</strong><br />
OECD could play under <strong>the</strong>se circumstances was a limited, though useful<br />
one. <strong>The</strong> industrial countries were grouped in <strong>the</strong> Oil Committee and its<br />
High-Level Group, composed <strong>of</strong> representatives <strong>of</strong> most <strong>of</strong> <strong>the</strong> leading<br />
industrial countries. Each body was convened four times during <strong>the</strong> crisis.<br />
37
Two reports on <strong>the</strong> supply situation were prepared for those bodies by <strong>the</strong><br />
Oil Committee Chairman, after informal consultation with a number <strong>of</strong> oil<br />
companies. Since <strong>the</strong> requisite unanimous approval was lacking, no<br />
attempt was made to activate <strong>the</strong> International Industry Advisory Body<br />
(IIAB), <strong>the</strong> established institutional channel for such consultation.<br />
Information exchanges on such matters as stock levels and supply and<br />
demand restraint measures took place in <strong>the</strong>se OECD meetings, as well as in<br />
meetings <strong>of</strong> Heads <strong>of</strong> Delegation <strong>of</strong> Members and in o<strong>the</strong>r informal meetings<br />
convened by <strong>the</strong> OECD Secretary-General. An effort to co-ordinate<br />
information ga<strong>the</strong>ring through an OECD Secretariat questionnaire was<br />
attempted without noticeable success. On <strong>the</strong> o<strong>the</strong>r hand, <strong>the</strong> OECD<br />
Council was able to adopt recommendations to its Members on <strong>the</strong> supply <strong>of</strong><br />
bunker fuels for shipping and fishing and on <strong>the</strong> supply <strong>of</strong> fuel for civil<br />
aircraft [C(73)257(Final)] and [C(73)258(Final)]. No o<strong>the</strong>r formal<br />
legislative or operational action was taken by <strong>the</strong> OECD Council during <strong>the</strong><br />
crisis. For <strong>the</strong> most part <strong>the</strong> individual governments and <strong>the</strong> major oil<br />
companies were left to <strong>the</strong>ir own devices to make <strong>the</strong> best <strong>the</strong>y could out <strong>of</strong><br />
this novel and perplexing situation.<br />
While <strong>the</strong> OECD’s information activity response was relatively useful<br />
as far as it went, <strong>the</strong> available information was not sufficient to meet <strong>the</strong><br />
needs <strong>of</strong> Member countries, and <strong>the</strong> institutional arrangements <strong>of</strong>fered by<br />
<strong>the</strong> OECD were clearly not strong enough for mounting a workable<br />
multilateral crisis management effort. This organizational inadequacy <strong>of</strong> <strong>the</strong><br />
industrial countries and <strong>the</strong> absence <strong>of</strong> convergent policies greatly increased<br />
<strong>the</strong>ir vulnerability to oil supply interruptions. Before <strong>the</strong> end <strong>of</strong> 1973, a<br />
clear perception <strong>of</strong> <strong>the</strong> industrial countries’ relative weakness led <strong>the</strong>ir<br />
policy-makers to consider more urgently <strong>the</strong> need to develop additional<br />
institutional mechanisms for dealing with <strong>the</strong>ir common energy problems.<br />
B. Industrial Countries’ New<br />
Organizational Requirements<br />
1. Lessons <strong>of</strong> <strong>the</strong> 1973-<strong>1974</strong> Crisis<br />
<strong>The</strong> process <strong>of</strong> assessment <strong>of</strong> <strong>the</strong> 1973-<strong>1974</strong> crisis began immediately while<br />
<strong>the</strong> first impacts <strong>of</strong> <strong>the</strong> crisis were felt. Consideration <strong>of</strong> <strong>the</strong> “lessons to be<br />
drawn” from <strong>the</strong> crisis continued in capitals, international organizations, oil<br />
companies, universities and elsewhere for years afterwards. On <strong>the</strong> institu-<br />
38
tional side, interest in future steps to be taken was particularly strong, for <strong>the</strong><br />
major lessons <strong>of</strong> <strong>the</strong> crisis involved a reassessment <strong>of</strong> <strong>the</strong> structure, composition,<br />
competence and operational arrangements <strong>of</strong> institutional co-operation<br />
in <strong>the</strong> energy field. <strong>The</strong> major lessons ultimately drawn by <strong>the</strong> industrial<br />
countries, as reflected in <strong>the</strong> later steps <strong>the</strong>y took, included <strong>the</strong> following:<br />
■ <strong>The</strong> World Market for Oil. <strong>The</strong> oil market should be seen essentially<br />
as one world market, for oil is a fungible commodity; market events<br />
almost anywhere in <strong>the</strong> world affect consumers everywhere in <strong>the</strong><br />
world, and would continue to do so in <strong>the</strong> future. Hence <strong>the</strong> major<br />
industrial countries throughout <strong>the</strong> world have common interests which<br />
should be addressed not only on an individual country basis, but also<br />
on a co-operative basis in permanent international institutions.<br />
■ <strong>The</strong> Broader Energy Problem. Since oil security is directly affected<br />
by broader issues concerning all major energy sources, energy<br />
conservation and <strong>the</strong> availability <strong>of</strong> alternative sources <strong>of</strong> energy such<br />
as coal and nuclear power (and <strong>the</strong> more exotic sources under<br />
research and development R & D) determine in part <strong>the</strong> dependence<br />
on oil, as do considerations <strong>of</strong> protection <strong>of</strong> <strong>the</strong> environment. Hence<br />
those subjects are sufficiently germane to bring <strong>the</strong>m toge<strong>the</strong>r with oil<br />
into <strong>the</strong> scope <strong>of</strong> policy co-operation in international institutions.<br />
■ Long-Term Energy Co-operation. International co-operation should<br />
be employed with a long-term goal to reduce oil import dependence and<br />
economic vulnerability. This co-operation would increase incentives for<br />
developing <strong>the</strong> supply <strong>of</strong> oil as well as enhance measures for conservation<br />
and use <strong>of</strong> alternative energy sources to reduce oil imports.<br />
■ Relations with Producers. Consumer countries should establish<br />
arrangements for co-operative relations with <strong>the</strong> oil producer countries<br />
and with o<strong>the</strong>r consumer countries in order to achieve better mutual<br />
understanding and to benefit from developments in <strong>the</strong> energy field.<br />
■ Safety Net: Oil Sharing, Treaty Rules. As a high priority matter,<br />
co-operative institutions should establish an oil emergency sharing<br />
system to enable industrial countries to share equitably among<br />
<strong>the</strong>mselves <strong>the</strong> burdens <strong>of</strong> any future oil embargo or supply<br />
disruption from natural or o<strong>the</strong>r causes. <strong>The</strong> sharing system and<br />
o<strong>the</strong>r key elements <strong>of</strong> co-operation should be established by means <strong>of</strong><br />
treaty rules, legally binding under international law, and should be<br />
organized through permanent international institutions.<br />
■ Fail-Safe Mechanism in <strong>the</strong> Sharing System. Operation <strong>of</strong> <strong>the</strong> oil<br />
sharing system should not require a prior unanimous decision <strong>of</strong> <strong>the</strong><br />
39
members (a form <strong>of</strong> prior political decision), but should be triggered<br />
by a secretariat, as part <strong>of</strong> a technical process <strong>of</strong> supply disruption<br />
assessment (administrative decision) when <strong>the</strong> treaty level <strong>of</strong> shortfall<br />
is reached, subject ultimately to political safeguards.<br />
■ Secretariat Role. <strong>The</strong> secretariat, as an impartial body <strong>of</strong> <strong>the</strong> new<br />
institution should receive extraordinary and unprecedented powers,<br />
including <strong>the</strong> ability to trigger <strong>the</strong> sharing system despite possible<br />
political pressures which might prevent governments from acting<br />
promptly or effectively in an oil emergency situation.<br />
■ Decision Making System. <strong>The</strong> new institution should have a workable<br />
system for making objective, rapid and effective decisions. Voting<br />
rules should not be governed solely by <strong>the</strong> traditional doctrine <strong>of</strong><br />
sovereign equality (one country, one vote), but should be designed to<br />
reflect <strong>the</strong> realities <strong>of</strong> decision-making in modern international<br />
organizations, including majority voting where possible and voting<br />
weighted in accordance with <strong>the</strong> members’ relative economic interest<br />
in <strong>the</strong> subject <strong>of</strong> <strong>the</strong> decision.<br />
■ Information Systems. Systems should be devised to develop more<br />
relevant and detailed information for oil market transparency<br />
generally and for <strong>the</strong> particular information, including confidential<br />
and proprietary data, required to operate <strong>the</strong> oil emergency sharing<br />
system. Arrangements should be made for <strong>the</strong> dissemination <strong>of</strong> such<br />
information as appropriate.<br />
■ Arrangements with Oil Companies. Finally, regular and systematic<br />
arrangements would have to be made with oil companies not only to<br />
provide to <strong>the</strong> new institution relevant information available to <strong>the</strong>m, but<br />
also to advise on <strong>the</strong> development and operation <strong>of</strong> <strong>the</strong> oil sharing system.<br />
<strong>The</strong>se were some <strong>of</strong> <strong>the</strong> major institutional “lessons” drawn from <strong>the</strong> 1973-<br />
<strong>1974</strong> crisis. <strong>The</strong>y would each have to be woven into <strong>the</strong> fabric <strong>of</strong> <strong>the</strong><br />
industrial countries’ new institutional arrangements for energy. As seen in<br />
<strong>the</strong> next Section, <strong>the</strong> “lessons” also raised questions about what form <strong>the</strong><br />
new institutions should take, and whe<strong>the</strong>r a wholly new institution should<br />
be formed or whe<strong>the</strong>r <strong>the</strong> new energy functions could be made part <strong>of</strong> an<br />
existing organization on ei<strong>the</strong>r an integrated or an autonomous basis.<br />
2. Range <strong>of</strong> Institutional Alternatives<br />
As <strong>the</strong> industrial countries absorbed <strong>the</strong> “lessons” described above, <strong>the</strong>y<br />
rapidly saw that <strong>the</strong> new energy functions called for an institutional “home”<br />
40
in a public international organization. A threshold question was whe<strong>the</strong>r<br />
<strong>the</strong> new institutional arrangements should constitute a series <strong>of</strong> ad hoc<br />
conferences or a permanent organization. <strong>The</strong> ad hoc alternative would be<br />
<strong>the</strong> weakest <strong>of</strong> all, in that each meeting would have to be organized and<br />
convened case by case as o<strong>the</strong>r diplomatic conferences are, without <strong>the</strong><br />
advantages <strong>of</strong> continuing organization and a dedicated secretariat.<br />
Complex operational functions, like <strong>the</strong> management <strong>of</strong> an oil emergency<br />
sharing system, would be difficult or impossible to carry out under those<br />
circumstances. Hence an ad hoc approach looked like a certain formula for<br />
failure, while a permanent structure would provide constant support and<br />
make rapid operational functions relatively easy to carry out, permitting<br />
industrial countries to engage in much more far-reaching energy cooperation.<br />
A permanent structure would also transmit a much stronger<br />
political message about <strong>the</strong> industrial countries’ resolve to co-operate in <strong>the</strong><br />
field <strong>of</strong> energy in general, and to deal with <strong>the</strong> more immediate problems <strong>of</strong><br />
oil supply crises in particular. Despite sporadic expressions <strong>of</strong> interest in an<br />
ad hoc conference approach in <strong>the</strong> aftermath <strong>of</strong> <strong>the</strong> crisis, this alternative<br />
did not find wide support and was soon abandoned. Among possible forms<br />
<strong>of</strong> permanent organization, a private foundation or corporation or nongovernmental<br />
organization or o<strong>the</strong>r arrangement unable to provide <strong>the</strong><br />
advantages <strong>of</strong> legally binding decision-making and <strong>the</strong> recognized status <strong>of</strong><br />
public intergovernmental organizations under international law would not<br />
be satisfactory. Most <strong>of</strong> <strong>the</strong> major industrial countries consistently favored<br />
<strong>the</strong> establishment <strong>of</strong> permanent institutions in <strong>the</strong> form <strong>of</strong> an intergovernmental<br />
organization, and that <strong>of</strong> course was <strong>the</strong> final outcome, which<br />
resulted in <strong>the</strong> grouping <strong>of</strong> those countries in an “agency” specifically<br />
designed to meet <strong>the</strong>ir objectives.<br />
<strong>The</strong> next key question for <strong>the</strong> industrial countries was whe<strong>the</strong>r <strong>the</strong><br />
permanent institutions should be grafted onto an existing organization on<br />
an integrated or autonomous basis, or should be framed in a wholly new<br />
agency with its own treaty and independent structure. In <strong>the</strong> end <strong>the</strong><br />
outcome consisted <strong>of</strong> something <strong>of</strong> each. From a practical standpoint <strong>the</strong>re<br />
was only one existing organization that could be seriously considered for <strong>the</strong><br />
grafting approach. Despite a number <strong>of</strong> <strong>the</strong> OECD’s institutional<br />
weaknesses which will be seen in <strong>the</strong> discussion below, <strong>the</strong> OECD<br />
alternative presented some attractive advantages. <strong>The</strong> OECD was already<br />
experienced in dealing with oil and o<strong>the</strong>r energy questions. <strong>The</strong> OECD<br />
enjoyed a highly developed and respected expertise in economic analysis<br />
and statistics. <strong>The</strong> OECD <strong>of</strong>fered an existing organization with an<br />
established staff, physical facilities, legal status and privileges and<br />
41
immunities, and it was an on-going concern in which a new agency could<br />
expect to function immediately. Moreover, <strong>the</strong> OECD was <strong>the</strong> principal<br />
organization <strong>of</strong> <strong>the</strong> industrial market economy countries and would be<br />
expected to embody any new institutional arrangements involving <strong>the</strong><br />
economic co-operation <strong>of</strong> those countries. Since all <strong>of</strong> <strong>the</strong> prospective<br />
participants were also Members <strong>of</strong> <strong>the</strong> OECD, a way might be found to<br />
accommodate <strong>the</strong> new functions in <strong>the</strong> existing structure <strong>of</strong> that<br />
Organisation without encountering insurmountable institutional difficulties.<br />
However, <strong>the</strong>re were o<strong>the</strong>r OECD considerations which presented<br />
possible problems for <strong>the</strong> industrial countries. While all <strong>of</strong> <strong>the</strong> prospective<br />
participants were OECD Members, <strong>the</strong> converse was not true. <strong>The</strong> OECD<br />
countries which would not be ready immediately to participate might find it<br />
politically difficult to have <strong>the</strong> new agency established within that<br />
Organisation. Under <strong>the</strong> OECD’s general voting rules, each <strong>of</strong> those<br />
countries could prevent <strong>the</strong> Council from taking <strong>the</strong> decision establishing<br />
<strong>the</strong> agency and might interfere with <strong>the</strong> decisions and operations <strong>of</strong><br />
<strong>the</strong> agency once it was established. <strong>The</strong> latter consideration in particular<br />
presented an unacceptable risk to <strong>the</strong> efficient operation <strong>of</strong> <strong>the</strong> new energy<br />
co-operation functions. Hence it would not be possible to establish <strong>the</strong> new<br />
arrangement as an integrated part <strong>of</strong> <strong>the</strong> OECD.<br />
Even if <strong>the</strong> membership <strong>of</strong> <strong>the</strong> OECD and a new agency should one<br />
day become co-extensive, serious questions were foreseen or foreseeable, for<br />
example:<br />
■<br />
■<br />
■<br />
■<br />
■<br />
Would a voting system with weighted voting be inconsistent with <strong>the</strong><br />
OECD’s provisions on those subjects?<br />
Would an executive head <strong>of</strong> an agency, holding special responsibilities<br />
and with recognized energy expertise, be subject to control by <strong>the</strong><br />
Secretary-General <strong>of</strong> <strong>the</strong> OECD?<br />
Could an operational agency function effectively and develop its own<br />
atmosphere and modes <strong>of</strong> working in <strong>the</strong> OECD, which was considered to<br />
be more <strong>of</strong> a think-tank without well defined operational responsibilities?<br />
Would members <strong>of</strong> an agency operating in <strong>the</strong> OECD be represented<br />
<strong>the</strong>re by high level <strong>of</strong>ficials from capitals with <strong>the</strong> necessary energy<br />
policy decision-making responsibilities in <strong>the</strong>ir governments? Would<br />
members’ representatives assure rapid adjustment to changes in <strong>the</strong><br />
energy field and promote <strong>the</strong> operations <strong>of</strong> <strong>the</strong> agency in accordance<br />
with <strong>the</strong> policies which might be developed for agency operations?<br />
Could an agency have its own Budgets and personnel policies, which<br />
might not always coincide with those <strong>of</strong> <strong>the</strong> OECD?<br />
42
■<br />
Could an agency have <strong>the</strong> policy advantages <strong>of</strong> a visibility separate<br />
from that <strong>of</strong> <strong>the</strong> OECD, which could be an important element <strong>of</strong><br />
acceptability and <strong>the</strong> respect with which it would be held throughout<br />
<strong>the</strong> world?<br />
<strong>The</strong> integrated institutional approach raised all <strong>of</strong> <strong>the</strong> foregoing questions,<br />
while <strong>the</strong> establishment <strong>of</strong> an agency on an autonomous basis with <strong>the</strong><br />
OECD was ano<strong>the</strong>r possibility to be considered. Still ano<strong>the</strong>r question was<br />
<strong>the</strong> means <strong>of</strong> establishing <strong>the</strong> policy and institutional commitments which<br />
would be necessary to meet <strong>the</strong> industrial countries’ objectives. That could<br />
be approached on <strong>the</strong> “s<strong>of</strong>t” basis <strong>of</strong> non-binding declarations or by<br />
decisions <strong>of</strong> an existing international organization like <strong>the</strong> OECD. A third<br />
possibility would be a separate treaty in which <strong>the</strong> objectives, policies,<br />
structure, binding legal rules, voting system and all <strong>the</strong> elements <strong>of</strong> a<br />
conventional international organization could be developed. <strong>The</strong> treaty<br />
approach could be adopted independently <strong>of</strong> o<strong>the</strong>r institutions, and itself<br />
create a new agency, or as part <strong>of</strong> arrangements for an autonomous relation<br />
<strong>of</strong> a new agency with an existing organization, with <strong>the</strong> advantages <strong>of</strong> each.<br />
<strong>The</strong>se were some <strong>of</strong> <strong>the</strong> alternative institutional ideas which were in <strong>the</strong><br />
air during <strong>the</strong> diplomatic process which began with policy formulations and<br />
consultations among <strong>the</strong> industrial countries during <strong>the</strong> 1973-<strong>1974</strong> crisis and<br />
continued until <strong>the</strong> International Energy Agency was established in November<br />
<strong>1974</strong>. <strong>The</strong> diplomatic phase included <strong>the</strong> lead-up to <strong>the</strong> Washington Energy<br />
Conference, <strong>the</strong> Washington Energy Conference itself in February <strong>1974</strong> and<br />
<strong>the</strong> follow-up negotiations which took place from February to November<br />
<strong>1974</strong> in <strong>the</strong> Energy Co-ordinating Group in Brussels, where <strong>the</strong> institutional<br />
as well as <strong>the</strong> policy and legal commitment questions were resolved.<br />
C. Diplomatic and Institutional Steps to<br />
Establish <strong>the</strong> <strong>IEA</strong><br />
1. Pilgrims Society Speech<br />
<strong>The</strong> initiative in proposing <strong>the</strong> establishment <strong>of</strong> <strong>the</strong> new energy institutions<br />
was taken by U. S. Secretary <strong>of</strong> State Kissinger in <strong>the</strong> midst <strong>of</strong> <strong>the</strong> 1973-<br />
<strong>1974</strong> crisis, when American thinking about <strong>the</strong> magnitude <strong>of</strong> <strong>the</strong> problem<br />
and <strong>the</strong> need for international co-operation had evolved to <strong>the</strong> point where<br />
43
new proposals could be made. In his address to <strong>the</strong> Pilgrims Society in<br />
London on 12 December 1973, Secretary Kissinger stated that <strong>the</strong> energy<br />
crisis <strong>of</strong> 1973 could become “<strong>the</strong> economic equivalent <strong>of</strong> <strong>the</strong> sputnik<br />
challenge <strong>of</strong> 1957” [Reproduced in USA Documents, Public Affairs Office,<br />
United States Mission to <strong>the</strong> European Communities, No. 61, 1973, p. 8,<br />
also available under <strong>the</strong> title “Secretary Kissinger Reviews U.S. - European<br />
Relations,” address by Secretary <strong>of</strong> State Henry A. Kissinger to Pilgrims <strong>of</strong><br />
Great Britain, London, England, 12 December 1973, S.I. 106: K64/3]. <strong>The</strong><br />
highly respected French newspaper Le Monde reported <strong>the</strong> Pilgrims Society<br />
speech under a headline “Un Nouveau ‘Discours de Harvard’,” referring to<br />
General Marshall’s Harvard speech <strong>of</strong> 5 June 1947, in which <strong>the</strong> Marshall<br />
Plan for post-war economic assistance to Europe was proposed [Le Monde,<br />
14 December 1973, p. 1, col. 3].<br />
Separating <strong>the</strong> transient from <strong>the</strong> underlying causes <strong>of</strong> <strong>the</strong> energy<br />
crisis, Secretary Kissinger remarked that it was “not simply a product <strong>of</strong> <strong>the</strong><br />
Arab-Israeli war; it is <strong>the</strong> inevitable consequence <strong>of</strong> <strong>the</strong> explosive growth <strong>of</strong><br />
world-wide demand outrunning <strong>the</strong> incentives for supply”. <strong>The</strong> long-term<br />
solution to <strong>the</strong> economic aspect <strong>of</strong> <strong>the</strong> energy crisis would be “a massive<br />
effort to provide producers an incentive to increase <strong>the</strong>ir supply, to<br />
encourage consumers to use existing supplies more rationally, and to<br />
develop alternate energy sources”.<br />
In order to realize <strong>the</strong>se objectives and to co-ordinate an international<br />
research program to develop new energy technologies, Secretary Kissinger<br />
proposed that an “Energy Action Group” be established by <strong>the</strong> countries <strong>of</strong><br />
Europe, North America and Japan. This proposal, which constituted <strong>the</strong><br />
first <strong>of</strong>ficial statement concerning new institutional arrangements, grouped<br />
toge<strong>the</strong>r high <strong>of</strong>ficials <strong>of</strong> those countries and provided for participation <strong>of</strong><br />
<strong>the</strong> European Economic Community and <strong>the</strong> developing countries. <strong>The</strong><br />
Pilgrims Society statement <strong>of</strong> Secretary Kissinger outlined in those terms <strong>the</strong><br />
organizational concept and major objectives which were later translated into<br />
<strong>the</strong> instruments establishing <strong>the</strong> International Energy Agency. Secretary<br />
Kissinger was not alone in speaking out on this question. A few days after<br />
his speech, <strong>the</strong>re was a summit conference <strong>of</strong> <strong>the</strong> European Communities at<br />
Copenhagen, at <strong>the</strong> close <strong>of</strong> which <strong>the</strong> conference Chairman Jørgensen declared<br />
that <strong>the</strong> Heads <strong>of</strong> State or Government considered that it would be<br />
“useful to study with o<strong>the</strong>r oil-consuming countries within <strong>the</strong> framework <strong>of</strong><br />
<strong>the</strong> OECD ways <strong>of</strong> dealing with <strong>the</strong> common short and long term energy<br />
problems <strong>of</strong> consumer countries” [See European Communities, Seventh<br />
General Report on <strong>the</strong> Activities <strong>of</strong> <strong>the</strong> European Communities in 1973,<br />
(<strong>1974</strong>), pp. 487 and 490].<br />
44
2. Washington Energy Conference<br />
<strong>The</strong> United States moved rapidly to achieve <strong>the</strong> organizational objective set<br />
out in <strong>the</strong> Pilgrims Society speech. On 11-13 February <strong>1974</strong> <strong>the</strong> Washington<br />
Energy Conference brought toge<strong>the</strong>r Ministerial level representatives <strong>of</strong> <strong>the</strong><br />
thirteen principal oil consumer countries (Belgium, Canada, Denmark,<br />
France, <strong>the</strong> Federal Republic <strong>of</strong> Germany, Ireland, Italy, Japan, Luxembourg,<br />
<strong>The</strong> Ne<strong>the</strong>rlands, Norway, <strong>the</strong> United Kingdom and <strong>the</strong> United States) as<br />
well as senior <strong>of</strong>ficials <strong>of</strong> <strong>the</strong> EEC and <strong>the</strong> OECD [See Washington Energy<br />
Conference February <strong>1974</strong>, Communiqué, Doc. 17 (Rev. 2), 13 February<br />
<strong>1974</strong>; reproduced in International Legal Materials, <strong>1974</strong>, vol. 13, p. 462].<br />
By that time <strong>the</strong> United States’ perception <strong>of</strong> <strong>the</strong> energy crisis included both<br />
its political aspect, represented by <strong>the</strong> embargo, and its economic and social<br />
element, represented by <strong>the</strong> dramatic increase in oil prices, and <strong>the</strong><br />
implications <strong>of</strong> both would have to be considered.<br />
In his welcoming speech, Secretary Kissinger emphasized first that<br />
“<strong>the</strong> energy situation poses severe economic and political problems for all<br />
nations. Isolated solutions are impossible” [Conference Document 6, p. 2].<br />
He declared that “this challenge can be met successfully only through<br />
concerted international action”, and he recognized that developing countries<br />
must be brought into <strong>the</strong> consultation on <strong>the</strong> energy problems. A basic consideration<br />
was that “Cooperation not confrontation must mark our relations<br />
with <strong>the</strong> producers”. Although specific proposals on institutions were not<br />
made at that time, <strong>the</strong> United States recognized its “national responsibility<br />
to contribute significantly to a collective solution” and stated its willingness<br />
to make specific proposals in <strong>the</strong> “follow-on” work <strong>of</strong> <strong>the</strong> Conference to<br />
share American advances in energy technology.<br />
<strong>The</strong> American policy statement on a programme for meeting <strong>the</strong><br />
energy crisis contained, in addition to <strong>the</strong> points mentioned in <strong>the</strong> Pilgrims<br />
Society speech, a proposal for <strong>the</strong> allocation <strong>of</strong> available supplies in time <strong>of</strong><br />
emergencies and prolonged shortages. This proposal reflected <strong>the</strong> judgment<br />
that “we cannot leave our security or our national economies to forces<br />
outside our control”. Offering to make available a portion <strong>of</strong> <strong>the</strong> total<br />
American petroleum supply in times <strong>of</strong> emergency or prolonged shortage,<br />
<strong>the</strong> United States’ proposals referred to an oil-sharing formula, to a system<br />
<strong>of</strong> criteria to determine <strong>the</strong> existence <strong>of</strong> oil supply shortages, to a<br />
mechanism for carrying out <strong>the</strong> arrangement, and to programmes for<br />
stockpiling and standby rationing.<br />
<strong>The</strong> Communiqué issued at <strong>the</strong> close <strong>of</strong> <strong>the</strong> Conference expressed <strong>the</strong><br />
agreement <strong>of</strong> <strong>the</strong> Ministers on “<strong>the</strong> need for a comprehensive action program<br />
to deal with all facets <strong>of</strong> <strong>the</strong> world energy situation by cooperative measures.<br />
45
In so doing <strong>the</strong>y will build on <strong>the</strong> work <strong>of</strong> <strong>the</strong> OECD” [Communiqué,<br />
point 9]. <strong>The</strong> action programme would cover <strong>the</strong> areas <strong>of</strong> conservation,<br />
demand restraint, emergency allocation <strong>of</strong> oil supplies, accelerated development<br />
<strong>of</strong> alternative energy sources, and research and development. This<br />
work would be carried out by “follow-on machinery,” a co-ordinating group<br />
which was instructed to develop a programme based on <strong>the</strong> considerations<br />
outlined above [point 16].<br />
<strong>The</strong> institutional beginning announced in <strong>the</strong> Communiqué was a<br />
modest but vital one. <strong>The</strong>re had been formal or informal discussions <strong>of</strong> a wide<br />
range <strong>of</strong> institutional possibilities, including “none at all” as one extreme, <strong>the</strong><br />
use <strong>of</strong> “contact groups”, <strong>the</strong> existing mechanisms <strong>of</strong> <strong>the</strong> OECD, <strong>the</strong> United<br />
Nations and o<strong>the</strong>r international organizations, or a new and separate<br />
international agency. However, <strong>the</strong> Communiqué did not prejudice <strong>the</strong><br />
ultimate outcome in any way. It did refer to monitoring and focusing on <strong>the</strong><br />
tasks which might be addressed in existing organizations and it provided that<br />
<strong>the</strong> group was to “Establish such ad hoc working groups as may be necessary<br />
to undertake tasks for which <strong>the</strong>re are presently no suitable bodies” [point<br />
16]. <strong>The</strong>re were also to be a conference <strong>of</strong> producer and consumer countries,<br />
and consultations with developing and o<strong>the</strong>r consumer and producer<br />
countries. As respects particular organizations, Ministers not only referred<br />
broadly to <strong>the</strong> OECD as noted above, but also “welcomed <strong>the</strong> initiatives in <strong>the</strong><br />
UN to deal with <strong>the</strong> larger issues <strong>of</strong> energy and primary products at a worldwide<br />
level” [point 15]. Although <strong>the</strong> modest institutional beginning contained<br />
in <strong>the</strong> Communiqué did not succeed in attracting <strong>the</strong> support <strong>of</strong> France, <strong>the</strong><br />
Conference outcome did represent <strong>the</strong> consensus view <strong>of</strong> all o<strong>the</strong>r Conference<br />
participants. <strong>The</strong> participants had developed clear but incompletely refined<br />
ideas <strong>of</strong> <strong>the</strong> necessary mechanisms, i.e. that <strong>the</strong>y must act toge<strong>the</strong>r, develop oil<br />
stocks, control energy demand and establish an effective organization. Still,<br />
<strong>the</strong> Communiqué gave little hint <strong>of</strong> <strong>the</strong> comprehensive policy and institutional<br />
mandates which were actually given <strong>the</strong> <strong>IEA</strong> later in <strong>the</strong> year as <strong>the</strong> outcome<br />
<strong>of</strong> <strong>the</strong> “follow-on” in <strong>the</strong> Energy Co-ordinating Group.<br />
3. Energy Co-ordinating Group (ECG)<br />
Shortly after <strong>the</strong> close <strong>of</strong> <strong>the</strong> Washington Conference, <strong>the</strong> Energy Coordinating<br />
Group (ECG) convened in Brussels to carry out <strong>the</strong> mandate<br />
given by <strong>the</strong> Conference and to develop <strong>the</strong> programme in detail. All <strong>of</strong> <strong>the</strong><br />
Washington Conference countries, with <strong>the</strong> exception <strong>of</strong> France,<br />
participated in <strong>the</strong> ECG, toge<strong>the</strong>r with <strong>the</strong> OECD and <strong>the</strong> Commission <strong>of</strong><br />
<strong>the</strong> European Communities. <strong>The</strong>y were later joined by Austria, Spain,<br />
46
Sweden, Switzerland and Turkey. <strong>The</strong> ECG was chaired first by<br />
Ambassador Roger Ockrent, a Pr<strong>of</strong>essor <strong>of</strong> International Law, Permanent<br />
Representative <strong>of</strong> Belgium to <strong>the</strong> OECD and long time Chairman <strong>of</strong> <strong>the</strong><br />
Executive Committee <strong>of</strong> that Organisation. Early in <strong>the</strong> life <strong>of</strong> <strong>the</strong> ECG, <strong>the</strong><br />
untimely death <strong>of</strong> Mr. Ockrent led to <strong>the</strong> succession <strong>of</strong> Ambassador Etienne<br />
Davignon <strong>of</strong> Belgium, who exercized strong leadership as Chairman <strong>of</strong> <strong>the</strong><br />
Group and later as <strong>the</strong> first Governing Board Chairman <strong>of</strong> <strong>the</strong> new Agency.<br />
Representatives <strong>of</strong> <strong>the</strong> seventeen countries and <strong>the</strong> two international<br />
institutions met toge<strong>the</strong>r at <strong>the</strong> Brussels Palais d’Egmont from early March<br />
until November <strong>1974</strong>, when <strong>the</strong>ir work culminated in agreed proposals for<br />
<strong>the</strong> establishment <strong>of</strong> <strong>the</strong> <strong>IEA</strong>. <strong>The</strong>se took <strong>the</strong> form <strong>of</strong> two draft instruments.<br />
<strong>The</strong> first was a draft OECD Council decision establishing <strong>the</strong> International<br />
Energy Agency called <strong>of</strong>ficially <strong>the</strong> “Decision <strong>of</strong> <strong>the</strong> Council Establishing an<br />
International Energy Agency <strong>of</strong> <strong>the</strong> Organisation”, hereinafter referred to as<br />
<strong>the</strong> “Council Decision”, adopted on 15 November <strong>1974</strong> by unanimity with<br />
<strong>the</strong> exception <strong>of</strong> abstentions by Finland, France and Greece<br />
[C(74)<strong>20</strong>3(Final); International Legal Materials, 1975, vol. 14, p. 789, and<br />
reproduced in Appendix IV below]. <strong>The</strong> second was <strong>the</strong> draft treaty entitled<br />
“Agreement on an International Energy Program”, hereinafter referred to as<br />
<strong>the</strong> “I.E.P. Agreement” or <strong>the</strong> “Agreement”, signed in Paris on 18 November<br />
<strong>1974</strong> [C(74)<strong>20</strong>3 and Corrigendum 1; International Legal Materials, 1975,<br />
vol. 14, p. 1, and reproduced in Appendix III below]. <strong>The</strong> work <strong>of</strong> <strong>the</strong> ECG<br />
went well beyond policy analysis, negotiation and drafting. It identified <strong>the</strong><br />
key directions for co-operation in energy policy, enabled <strong>the</strong> senior <strong>of</strong>ficials<br />
<strong>of</strong> <strong>the</strong> seventeen countries and <strong>the</strong> two organizations to understand each<br />
o<strong>the</strong>r’s problems, which was significant in itself, and fostered a firm sense <strong>of</strong><br />
confidence that <strong>the</strong> group could work toge<strong>the</strong>r effectively with worthwhile<br />
results in a permanent institutional setting. That sense <strong>of</strong> confidence and<br />
mutual respect provided <strong>the</strong> new Agency with its fundamental wellspring<br />
which endures to <strong>the</strong> present day.<br />
<strong>The</strong> ECG set <strong>the</strong> tone and atmosphere <strong>of</strong> <strong>the</strong> Agency at that time and<br />
in <strong>the</strong> years that followed. Indeed, <strong>the</strong> early meetings <strong>of</strong> <strong>the</strong> Governing<br />
Board were very much like <strong>the</strong> ECG transported from Brussels to Paris.<br />
Many <strong>of</strong> <strong>the</strong> key representatives had participated fully in <strong>the</strong> ECG. <strong>The</strong><br />
ECG Chairman Davignon (Belgium) took <strong>the</strong> Chair <strong>of</strong> <strong>the</strong> Governing Board<br />
for <strong>the</strong> first two years. His successor as Governing Board Chairman for <strong>the</strong><br />
following two years, D. K. Rohwedder (Germany), had led his country’s<br />
delegation in <strong>the</strong> ECG. Of great operational importance for <strong>the</strong> <strong>IEA</strong> was <strong>the</strong><br />
maintenance in <strong>the</strong> Governing Board <strong>of</strong> <strong>the</strong> élan and spirit <strong>of</strong> co-operation<br />
which had proved to be so productive in Brussels. From <strong>the</strong> outset, <strong>the</strong><br />
47
main operating principles <strong>of</strong> <strong>the</strong> Agency were its flexibility, operational<br />
efficiency and simplicity [as will be seen in Chapter VIII, Section A below];<br />
each was a direct inheritance from <strong>the</strong> ECG. <strong>The</strong> Agency still exists very<br />
much in <strong>the</strong> institutional mould that was crafted in <strong>1974</strong> by <strong>the</strong> ECG.<br />
4. Founders’ Objectives<br />
<strong>The</strong> founders’ objectives were drawn into sharp focus in <strong>the</strong> ECG, where <strong>the</strong><br />
objectives on substantive policy retained <strong>the</strong> broad elements developed in<br />
<strong>the</strong> Washington Energy Conference but were supplemented with more<br />
concrete and far-reaching institutional notions. On all issues, <strong>the</strong> ECG<br />
contributed refined concepts and detailed formulations in treaty and formal<br />
decision language.<br />
On programme content, <strong>the</strong> founders continued to be concerned above<br />
all with overall energy security, and particularly with oil supply security.<br />
This was translated into <strong>the</strong> Emergency Sharing System Chapters <strong>of</strong> <strong>the</strong><br />
I.E.P. Agreement [Chapters I to IV inclusive], where meticulously detailed<br />
treaty rules and operational mechanisms were established. Energy security<br />
was envisaged on a still wider basis, however, to include Members’ overall<br />
reduction <strong>of</strong> “<strong>the</strong>ir dependence on imported oil by undertaking long-term cooperative<br />
efforts on conservation <strong>of</strong> energy, on accelerated development <strong>of</strong><br />
alternative sources <strong>of</strong> energy, on research and development in <strong>the</strong> energy field<br />
and on uranium enrichment” [I.E.P. Agreement, Preamble, paragraph 6].<br />
<strong>The</strong> founders translated this objective into <strong>the</strong> Long Term Co-operation<br />
Chapter [Chapter VII <strong>of</strong> <strong>the</strong> Agreement] and later, in more specific<br />
formulations into <strong>the</strong> Long-Term Co-operation Programme. <strong>The</strong>y retained<br />
<strong>the</strong> producer-consumer country co-operation objective in a statement on <strong>the</strong><br />
desire <strong>of</strong> <strong>IEA</strong> countries “to promote co-operative relations with oil producing<br />
countries and with o<strong>the</strong>r oil consuming countries, including those <strong>of</strong> <strong>the</strong><br />
developing world, through a purposeful dialogue, as well as through o<strong>the</strong>r<br />
forms <strong>of</strong> co-operation, to fur<strong>the</strong>r <strong>the</strong> opportunities for a better understanding<br />
between consumer and producer countries” [Preamble, paragraph 3], which<br />
was translated into Chapter VIII <strong>of</strong> <strong>the</strong> Agreement. Ano<strong>the</strong>r objective was<br />
stated much more clearly than previously: <strong>the</strong> desire “to play a more active<br />
role in relation to <strong>the</strong> oil industry by establishing a comprehensive<br />
international information system and a permanent framework for<br />
consultation with oil companies” [Preamble paragraph 5], which was taken<br />
into Chapters V and VI <strong>of</strong> <strong>the</strong> Agreement.<br />
While <strong>the</strong> programme objectives were largely foreseen in <strong>the</strong><br />
Washington Energy Conference, <strong>the</strong> ECG brought innovation in form as<br />
48
well as body to <strong>the</strong> scant institutional objectives stated in <strong>the</strong> Washington<br />
Communiqué. ECG Chairman Davignon reflected a major institutional<br />
objective in his statement that <strong>the</strong> Members<br />
must incorporate operational arrangements capable <strong>of</strong> providing<br />
a framework for co-operation which can rapidly be put into<br />
motion on <strong>the</strong> basis <strong>of</strong> efficient decision-making machinery.<br />
[Davignon, “<strong>The</strong> Aims <strong>of</strong> <strong>the</strong> International Energy Agency”, OECD<br />
Observer, No. 73, January-February 1975, p. <strong>20</strong>]. <strong>The</strong> founders translated<br />
this institutional goal into Chapter IX and <strong>the</strong> decision process which<br />
appears throughout <strong>the</strong> Agreement. In referring to arrangements being<br />
made to create <strong>the</strong> new Agency within <strong>the</strong> framework <strong>of</strong> OECD, Chairman<br />
Davignon also stated that this<br />
responds to a complex need: to maintain <strong>the</strong> political impetus<br />
and ensure <strong>the</strong> efficiency <strong>of</strong> <strong>the</strong> work, yet be able to draw upon<br />
<strong>the</strong> knowledge and experience <strong>of</strong> an existing organisation.<br />
<strong>The</strong> founders also sought to enlarge <strong>the</strong> membership <strong>of</strong> <strong>the</strong> <strong>IEA</strong> to include<br />
<strong>the</strong> o<strong>the</strong>r Members <strong>of</strong> <strong>the</strong> OECD, <strong>of</strong> which <strong>the</strong>re were eight at that time.<br />
This appears in <strong>the</strong> Preamble’s recognition that o<strong>the</strong>r Members <strong>of</strong> OECD<br />
“may desire” to join in <strong>the</strong> <strong>IEA</strong> Members’ efforts (Preamble, paragraph 9).<br />
Institutional objectives also included <strong>the</strong> wish that <strong>the</strong> <strong>IEA</strong> not duplicate or<br />
impair in any way <strong>the</strong> work <strong>of</strong> o<strong>the</strong>r international organizations but ra<strong>the</strong>r<br />
that it facilitate o<strong>the</strong>r organizations in <strong>the</strong>ir work, particularly <strong>the</strong> work <strong>of</strong><br />
<strong>the</strong> OECD. In grafting <strong>the</strong> <strong>IEA</strong> onto an existing institution, <strong>the</strong> founders<br />
also sought to avoid <strong>the</strong> need to build a wholly new and independent<br />
organization which might be seen as leading to confrontation with oil<br />
producers, while Agency countries wished in fact to widen and fur<strong>the</strong>r<br />
develop international co-operation in <strong>the</strong> energy sector. <strong>The</strong> founders’<br />
overall objectives were confirmed by Chairman Davignon in his<br />
“Chairman’s Statement to <strong>the</strong> Press” <strong>of</strong> 18 November <strong>1974</strong> [reproduced in<br />
Annex II to <strong>IEA</strong>/GB(74)9(1st Revision), pp. 22-24].<br />
5. OECD Council Decision<br />
After <strong>the</strong> Energy Co-ordinating Group completed its work in producing<br />
<strong>the</strong> proposed I.E.P. Agreement and <strong>the</strong> Council Decision texts, <strong>the</strong> next<br />
formal steps to be taken in founding <strong>the</strong> <strong>IEA</strong> were actions bringing <strong>the</strong>se<br />
49
instruments into force. <strong>The</strong> ECG’s draft I.E.P. Agreement, containing <strong>the</strong><br />
detailed energy programme provisions as well as <strong>the</strong> essential internal and<br />
external institutional arrangements, needed to be processed pursuant to<br />
established treaty procedures under international law, including signature<br />
and formal ratification. <strong>The</strong> OECD Council Decision needed to be adopted<br />
by <strong>the</strong> OECD pursuant to that Organisation’s procedures, which called for<br />
unanimity <strong>of</strong> OECD Members but permitted abstentions. Although both<br />
instruments were essential to <strong>the</strong> ECG concept <strong>of</strong> <strong>the</strong> Agency as an<br />
autonomous unit <strong>of</strong> <strong>the</strong> OECD, one or <strong>the</strong> o<strong>the</strong>r had to be adopted first, and<br />
for practical reasons that turned out to be <strong>the</strong> OECD Council Decision.<br />
<strong>The</strong> paramount reason for this sequence was <strong>the</strong> lingering uncertainty<br />
about whe<strong>the</strong>r or not <strong>the</strong> OECD in <strong>the</strong> end would be able to adopt <strong>the</strong><br />
Decision. Only sixteen <strong>of</strong> <strong>the</strong> twenty-four OECD countries were ready to<br />
participate in <strong>the</strong> <strong>IEA</strong> at <strong>the</strong> outset. <strong>The</strong> <strong>IEA</strong> structures included innovations<br />
which might encounter resistance in <strong>the</strong> OECD, such as <strong>the</strong> system <strong>of</strong> voting<br />
weights, never before employed in <strong>the</strong> OECD, and <strong>the</strong> <strong>IEA</strong> rule on majority<br />
voting on most decisions and all recommendations, actions which required<br />
unanimity under OECD rules. Moreover, since France had not fully joined in<br />
<strong>the</strong> Washington Conference Communiqué and had not participated directly<br />
in <strong>the</strong> ECG negotiations, <strong>the</strong>re was some question about whe<strong>the</strong>r France<br />
would exercise its power to prevent <strong>the</strong> Agency from being established, even<br />
as an autonomous Agency, as a formal part <strong>of</strong> an organization where France<br />
was <strong>the</strong> host country and an important as well as highly visible Member.<br />
None <strong>of</strong> <strong>the</strong> o<strong>the</strong>r OECD countries which declined at <strong>the</strong> outset to participate<br />
in <strong>IEA</strong> was considered to have such strong doubts as to raise that kind <strong>of</strong><br />
question, for most <strong>of</strong> <strong>the</strong>m were not fully ready <strong>the</strong>n to join <strong>the</strong> Agency but<br />
would do so within its first few years. Yet <strong>the</strong> two instruments were written<br />
on <strong>the</strong> assumption that France would not interpose a formal objection.<br />
Although France would not itself join immediately, it was expected that<br />
France would abstain from acting on <strong>the</strong> proposal and would thus permit <strong>the</strong><br />
Decision to be adopted. That <strong>of</strong> course is what finally transpired.<br />
Until shortly before <strong>the</strong> mid-November target date for <strong>the</strong> OECD<br />
Council Decision, <strong>the</strong>re was no clear assurance that <strong>the</strong> Decision could be<br />
adopted at all, and if adopted what its final terms might be. Since <strong>the</strong> final<br />
text <strong>of</strong> <strong>the</strong> I.E.P. Agreement necessarily contained references to <strong>the</strong> OECD,<br />
<strong>the</strong> Agreement could not be signed before <strong>the</strong> Council Decision was<br />
adopted. If <strong>the</strong> proposed Decision were to fail in <strong>the</strong> OECD Council, <strong>the</strong><br />
draft I.E.P. Agreement would have to be amended to delete references in<br />
paragraphs 8 and 9 <strong>of</strong> <strong>the</strong> Preamble to <strong>the</strong> establishment <strong>of</strong> <strong>IEA</strong> organs in<br />
<strong>the</strong> OECD and to o<strong>the</strong>r possible OECD Members joining <strong>the</strong> Agency, as well<br />
50
as <strong>the</strong> provisions <strong>of</strong> Article 64.1 on <strong>the</strong> OECD scale <strong>of</strong> contribution rules<br />
and <strong>of</strong> Article 71 on accession to <strong>the</strong> Agreement by OECD Members.<br />
Moreover, if <strong>the</strong> Agency were not to become part <strong>of</strong> <strong>the</strong> OECD, <strong>the</strong><br />
prospective Members would have to consider adding a number <strong>of</strong> provisions<br />
to complete explicitly some <strong>of</strong> <strong>the</strong> institutional aspects <strong>of</strong> <strong>the</strong> Agency, which<br />
had been left to inference, like <strong>the</strong> actual creation <strong>of</strong> <strong>the</strong> <strong>IEA</strong> (<strong>the</strong> language<br />
usually employed states that <strong>the</strong> parties “hereby establish an international<br />
organization to be known as . . .” or ano<strong>the</strong>r formulation to that effect,<br />
which did not appear in <strong>the</strong> draft I.E.P. Agreement). O<strong>the</strong>r additions to be<br />
made would have included an explicit text on <strong>the</strong> objective legal personality<br />
and privileges and immunities <strong>of</strong> <strong>the</strong> Agency and <strong>the</strong> Secretariat and<br />
additional provisions on institutional aspects <strong>of</strong> <strong>the</strong> new Agency. With <strong>the</strong><br />
adoption <strong>of</strong> <strong>the</strong> Council Decision, <strong>the</strong>se concerns promptly disappeared.<br />
<strong>The</strong> draft Council Decision as developed in <strong>the</strong> ECG was <strong>the</strong> subject<br />
<strong>of</strong> considerable debate, some <strong>of</strong> which reverted to more modest institutional<br />
views expressed at <strong>the</strong> Washington Energy Conference. In <strong>the</strong> OECD, <strong>the</strong>re<br />
were suggestions in <strong>the</strong> air that would have tended to tighten <strong>the</strong> links<br />
between <strong>the</strong> Agency and <strong>the</strong> OECD and to establish an enlarged measure <strong>of</strong><br />
OECD presence in Agency operations. Those suggestions contained elements<br />
■<br />
■<br />
■<br />
■<br />
■<br />
■<br />
to adopt <strong>the</strong> name “Energy Agency <strong>of</strong> <strong>the</strong> Organisation” instead <strong>of</strong><br />
International Energy Agency, which would highlight <strong>the</strong> OECD<br />
connection ra<strong>the</strong>r than <strong>the</strong> autonomy <strong>of</strong> <strong>the</strong> Agency;<br />
to remove <strong>the</strong> characterization <strong>of</strong> <strong>the</strong> <strong>IEA</strong> as an autonomous<br />
institution, as being unnecessary in view <strong>of</strong> <strong>the</strong> text as a whole;<br />
to provide emphasis in Article 6(a)(v) on <strong>the</strong> co-operation <strong>of</strong> <strong>the</strong><br />
Agency with o<strong>the</strong>r Member countries <strong>of</strong> <strong>the</strong> OECD;<br />
to arrange for <strong>the</strong> <strong>IEA</strong> Secretariat to function under <strong>the</strong> authority <strong>of</strong><br />
<strong>the</strong> OECD Secretary-General, not that <strong>of</strong> <strong>the</strong> Executive Director<br />
alone, in accordance with <strong>the</strong> instructions and orders <strong>of</strong> <strong>the</strong><br />
Governing Board, with both to be responsible to <strong>the</strong> Governing Board<br />
for <strong>the</strong> execution <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Program;<br />
to arrange for <strong>the</strong> Executive Director to be appointed on <strong>the</strong> proposal<br />
<strong>of</strong> <strong>the</strong> Secretary-General;<br />
to integrate <strong>the</strong> <strong>IEA</strong> Budget into <strong>the</strong> Budget <strong>of</strong> <strong>the</strong> Organisation as in<br />
o<strong>the</strong>r OECD special Budgets (technically referred to as Part II Budgets<br />
in OECD terminology, and requiring OECD Council unanimity).<br />
While <strong>the</strong>re was some accommodation to those views [See Council Decision<br />
Articles 1, 7(a) and (b), and 10(a)], and o<strong>the</strong>r minor improvements were<br />
51
adopted, <strong>the</strong> main elements <strong>of</strong> those views were not accepted by <strong>the</strong> future<br />
<strong>IEA</strong> Members. A workable balance between <strong>the</strong> OECD’s institutional<br />
interests and <strong>the</strong> <strong>IEA</strong>’s requirement <strong>of</strong> autonomy having been struck in <strong>the</strong><br />
course <strong>of</strong> earlier discussions in <strong>the</strong> ECG and in bilateral contacts, <strong>the</strong> basic<br />
elements <strong>of</strong> that balance were not to be disturbed.<br />
In <strong>the</strong> end, <strong>the</strong> draft Council Decision was adopted on 15 November<br />
<strong>1974</strong> without extensive amendment and in <strong>the</strong> form in which it had been<br />
negotiated in Brussels. It was clear that <strong>the</strong> OECD Secretary-General<br />
welcomed <strong>the</strong> setting up <strong>of</strong> <strong>the</strong> <strong>IEA</strong> within <strong>the</strong> OECD, for this was regarded<br />
as being fully in harmony with <strong>the</strong> OECD Convention and traditions. <strong>The</strong>re<br />
was an expectation that <strong>the</strong> Agency would also contribute a dynamic element<br />
to <strong>the</strong> Organisation and that <strong>the</strong> o<strong>the</strong>r bodies <strong>of</strong> <strong>the</strong> OECD would gain from<br />
close association with <strong>the</strong> work <strong>of</strong> <strong>the</strong> Agency, which in turn would benefit<br />
from its close association with <strong>the</strong> OECD. <strong>The</strong> establishment <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
would reduce nei<strong>the</strong>r <strong>the</strong> general co-operative efforts within <strong>the</strong> OECD nor<br />
<strong>the</strong> work <strong>of</strong> its various bodies on energy policies and related questions.<br />
At <strong>the</strong> Council meeting on 15 November <strong>1974</strong>, most Delegates noted<br />
<strong>the</strong> general function <strong>of</strong> <strong>the</strong> Agency in energy co-operation and <strong>of</strong> particular<br />
elements <strong>of</strong> <strong>the</strong> Program, including <strong>the</strong> emergency plan, alternative<br />
energies, research and development, relations with oil companies and <strong>the</strong><br />
information system. Strong supporting statements were made by <strong>the</strong><br />
Delegates for Austria, Belgium, Canada, Spain, Sweden, Switzerland and<br />
Turkey. Neutrality was mentioned by <strong>the</strong> countries which would make a<br />
statement on that subject at <strong>the</strong> I.E.P. Agreement signature ceremony on<br />
18 November. Reference to co-operation with oil producers or a future<br />
dialogue with <strong>the</strong>m or both was made by most <strong>of</strong> <strong>the</strong> Delegates, including<br />
<strong>the</strong> Delegates <strong>of</strong> some countries which were not able to become Members <strong>of</strong><br />
<strong>the</strong> Agency at <strong>the</strong> outset (e.g. Finland, France, New Zealand, Norway).<br />
Among <strong>the</strong> countries not immediately becoming Members <strong>of</strong> <strong>the</strong> Agency,<br />
Australia explained concerns about its responsibility to provide petroleum<br />
products to nearby countries, about co-operation in bunkering for shipping or<br />
for particular grades <strong>of</strong> oil and about co-operation between producers and<br />
consumers in international commodity trade. <strong>The</strong> Delegate for Finland<br />
referred to participation in parts <strong>of</strong> <strong>IEA</strong> co-operation <strong>of</strong> special interest to<br />
Finland. France spoke on <strong>the</strong> situation <strong>of</strong> non-Members and to <strong>the</strong> scope <strong>of</strong><br />
<strong>IEA</strong> activities. In New Zealand <strong>the</strong> Government had not yet taken a decision<br />
on membership but was expected to do so shortly. Iceland did not envisage<br />
joining <strong>the</strong> Agency. Norway was prepared to enter into a separate, binding<br />
agreement with <strong>the</strong> Agency and soon did so [See Chapter IV, Section A-3<br />
below]. <strong>The</strong> o<strong>the</strong>r OECD Members which could not join in <strong>1974</strong>, with <strong>the</strong><br />
52
exception <strong>of</strong> Iceland, did become Members in <strong>the</strong> years that followed. <strong>The</strong><br />
new <strong>IEA</strong> Members also made a declaration in <strong>the</strong> Council in which <strong>the</strong>y<br />
indicated that <strong>the</strong> task <strong>of</strong> <strong>the</strong> new Agency would be to implement <strong>the</strong> I.E.P.<br />
Agreement in all respects and thus to work on all aspects <strong>of</strong> energy. <strong>The</strong>y<br />
stressed <strong>the</strong> autonomy and operational character <strong>of</strong> <strong>the</strong> Agency and <strong>the</strong>ir<br />
wish to extend <strong>the</strong> benefits <strong>of</strong> its work to <strong>the</strong> OECD as a whole, through<br />
reciprocal co-operation and consultation in <strong>the</strong> context <strong>of</strong> <strong>the</strong> relationship<br />
between <strong>the</strong> two institutions.<br />
<strong>The</strong> Decision was adopted unanimously by <strong>the</strong> OECD Council on<br />
15 November <strong>1974</strong>, with abstentions by Finland, France and Greece. <strong>The</strong><br />
text <strong>of</strong> <strong>the</strong> Decision, reproduced in full in Appendix IV below, may be<br />
summarized as follows:<br />
■ Formal establishment. Article 1 states that <strong>the</strong> <strong>IEA</strong> “is hereby<br />
established as an autonomous body within <strong>the</strong> framework <strong>of</strong> <strong>the</strong><br />
Organisation” [See Chapter IV, Section C below].<br />
■ Membership. Article 2 identifies <strong>the</strong> original 16 Members and<br />
provides for new Members [See Chapter IV, Section A below].<br />
■ European Communities (European Union). Article 3 provides for<br />
accession by <strong>the</strong> Communities [See Chapter IV, Section D-3 below].<br />
■ Governing Board. Articles 4 and 5 contain provisions on <strong>the</strong><br />
composition and powers <strong>of</strong> <strong>the</strong> Governing Board as <strong>the</strong> supreme body<br />
<strong>of</strong> <strong>the</strong> Agency, on <strong>the</strong> binding nature <strong>of</strong> its decisions, on delegation <strong>of</strong><br />
powers, on rules <strong>of</strong> procedure and voting rules, and on powers to<br />
establish organs and adopt procedures required for <strong>the</strong> proper<br />
functioning <strong>of</strong> <strong>the</strong> Agency [See Chapter V, Section A below].<br />
■ International Energy Program. Article 6 provides for <strong>the</strong><br />
Governing Board specifically to adopt an International Energy<br />
Program, with aims corresponding to <strong>the</strong> main programme<br />
provisions <strong>of</strong> <strong>the</strong> Agreement, and to adopt o<strong>the</strong>r measures <strong>of</strong> cooperation<br />
in <strong>the</strong> energy field; upon <strong>the</strong> Governing Board’s proposal<br />
<strong>the</strong> Council may confer o<strong>the</strong>r responsibilities upon <strong>the</strong> Agency [See<br />
Chapter III below].<br />
■ Provision for Staff. Article 7 refers to <strong>the</strong> staff <strong>of</strong> <strong>the</strong> Agency as<br />
forming part <strong>of</strong> <strong>the</strong> Secretariat <strong>of</strong> <strong>the</strong> OECD; but <strong>the</strong> staff is also to<br />
report to and be responsible to <strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency; provision<br />
is made as well for appointment by <strong>the</strong> Governing Board <strong>of</strong> <strong>the</strong><br />
Executive Director <strong>of</strong> <strong>the</strong> Agency on <strong>the</strong> proposal or with <strong>the</strong><br />
concurrence <strong>of</strong> <strong>the</strong> OECD Secretary-General [See Chapter VI<br />
below].<br />
53
■ Reports to <strong>the</strong> OECD Council. Article 8 calls for an annual<br />
report by <strong>the</strong> Governing Board and o<strong>the</strong>r communications on its<br />
initiative or on request <strong>of</strong> <strong>the</strong> Council [See Chapter IV, Section C-2<br />
below].<br />
■ Co-operation With Bodies <strong>of</strong> <strong>the</strong> OECD. Article 9 provides for <strong>the</strong><br />
Agency to co-operate with o<strong>the</strong>r competent OECD bodies in areas <strong>of</strong><br />
common interest, and for those bodies and <strong>the</strong> Agency to consult with<br />
one ano<strong>the</strong>r regarding <strong>the</strong>ir respective activities [See Chapter IV,<br />
Section C-2 below].<br />
■ Budget and Finance. Article 10 contains detailed provisions on<br />
budget and finance questions: <strong>the</strong> <strong>IEA</strong> Budget is to be part <strong>of</strong> <strong>the</strong><br />
OECD Budget (Part II), <strong>the</strong> Board is to fix <strong>the</strong> Members’ shares <strong>of</strong><br />
contributions, provision is made for special expenses and for <strong>the</strong> <strong>IEA</strong><br />
to have an advisory organ on financial and budgetary questions;<br />
autonomy on <strong>the</strong>se questions is provided under a procedure whereby<br />
<strong>the</strong> Board’s Budget proposals are adopted in <strong>the</strong> Council when <strong>the</strong><br />
same Members who voted for <strong>the</strong>m in <strong>the</strong> Board also vote for <strong>the</strong>m in<br />
<strong>the</strong> Council; <strong>the</strong> Board is empowered to accept voluntary contributions,<br />
grants and payments for services rendered by <strong>the</strong> Agency<br />
[See Chapter VII below].<br />
■ Special Activities. Article 11 establishes rules for special activities<br />
o<strong>the</strong>r than those required to be carried out by all Members under <strong>the</strong><br />
Agreement [See Chapter V, Section A-18 below].<br />
■ External Relations. Article 12 contains broadly <strong>the</strong> same text on<br />
this subject that is found in Article 63 <strong>of</strong> <strong>the</strong> I.E.P. Agreement [See<br />
Chapter IV, Section D below].<br />
■ Application <strong>of</strong> <strong>the</strong> Agreement. Article 13 provides for cessation <strong>of</strong><br />
membership <strong>of</strong> a country for which <strong>the</strong> Agreement is no longer<br />
applicable, but arranges for continued participation <strong>of</strong> a country<br />
which gives special notice that <strong>the</strong> International Energy Program is<br />
binding upon it pursuant to this Decision [See Section C-7 and<br />
Chapter IV, Section A-1 below].<br />
■ Entry into Force. Article 14 provides for <strong>the</strong> Decision to enter into<br />
force on 15 November <strong>1974</strong>, <strong>the</strong> day <strong>of</strong> its adoption.<br />
Since <strong>the</strong> entry into force <strong>of</strong> <strong>the</strong> Decision, occasion for amending <strong>the</strong><br />
Decision has never arisen, nor has that subject ever been discussed in <strong>the</strong><br />
Governing Board or <strong>the</strong> OECD Council. Meanwhile Finland, France and<br />
Greece have withdrawn <strong>the</strong>ir abstentions and have joined in <strong>the</strong> Decision,<br />
each in connection with its respective application for membership in <strong>the</strong><br />
54
Agency, thus bringing <strong>the</strong> support <strong>of</strong> all OECD countries to <strong>the</strong> Decision.<br />
(Iceland did not abstain but it is not a Member <strong>of</strong> <strong>the</strong> Agency).<br />
6. Agreement on an International Energy Program<br />
<strong>The</strong> establishment <strong>of</strong> <strong>the</strong> Agency within <strong>the</strong> framework <strong>of</strong> OECD was<br />
effected not only by <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> OECD Council Decision, but also by<br />
<strong>the</strong> conclusion <strong>of</strong> an international agreement among <strong>the</strong> Members. While<br />
<strong>the</strong> main function <strong>of</strong> <strong>the</strong> Council Decision was to graft <strong>the</strong> Agency onto <strong>the</strong><br />
OECD and to make <strong>the</strong> institutional arrangements with <strong>the</strong> OECD for that<br />
purpose, <strong>the</strong> Agreement was designed to deal more specifically with those<br />
substantive elements <strong>of</strong> energy relations and <strong>the</strong> corresponding institutional<br />
arrangements which in <strong>the</strong> aggregate are designated as <strong>the</strong> “International<br />
Energy Program”. Although <strong>the</strong> Program could have been adopted with<br />
binding effect in <strong>the</strong> Council Decision, <strong>the</strong> treaty form was thought to<br />
provide advantages flowing from parliamentary commitment, and from <strong>the</strong><br />
treaty’s formality, visibility and fully independent legal standing.<br />
<strong>The</strong> Agreement on an International Energy Program (<strong>the</strong> I.E.P.<br />
Agreement) was signed by representatives <strong>of</strong> <strong>the</strong> sixteen founding Members<br />
at <strong>the</strong> OECD in Paris on 18 November <strong>1974</strong>, three days after <strong>the</strong> Council<br />
Decision was adopted. <strong>The</strong> Agreement entered into provisional application<br />
immediately upon signature [See Chapter III, Section D below]. It entered<br />
formally into force on 19 January 1976 for <strong>the</strong> Members which had taken<br />
<strong>the</strong>ir consent to be bound action in sufficient time; for o<strong>the</strong>r Members it<br />
entered into force ten days after <strong>the</strong>ir respective consents to be bound were<br />
deposited. <strong>The</strong> current total number <strong>of</strong> Members, each <strong>of</strong> which has taken<br />
its definitive action to be bound, is twenty-three (all OECD Members<br />
except Iceland) [See International Energy Agency Membership, Appendix I<br />
below].<br />
<strong>The</strong> Agreement itself was made in binding treaty form under<br />
international law [See Article 5 <strong>of</strong> <strong>the</strong> Vienna Convention on <strong>the</strong> Law <strong>of</strong><br />
Treaties]. <strong>The</strong> framers thus intended to adopt <strong>the</strong> I.E.P. in <strong>the</strong> most solemn<br />
form <strong>of</strong> international instrument to ensure <strong>the</strong> highest commitment <strong>of</strong><br />
governments to <strong>the</strong> Program as a whole and particularly to <strong>the</strong> detailed<br />
rules governing <strong>the</strong> Agency’s oil Emergency Sharing System. In Article 1<br />
Members formally undertook to “implement <strong>the</strong> International Energy<br />
Program as provided for in this Agreement through <strong>the</strong> International<br />
Energy Agency, described in Chapter IX . . .”.<br />
<strong>The</strong> I.E.P. Agreement includes provisions covering energy policy<br />
questions in <strong>the</strong> broadest sense <strong>of</strong> <strong>the</strong> term as well as details <strong>of</strong> <strong>the</strong><br />
55
institutional arrangements and <strong>the</strong> usual formal and final clauses.<br />
Significantly, <strong>the</strong> main directions <strong>of</strong> <strong>the</strong> Agreement follow <strong>the</strong> policy sectors<br />
taken up in <strong>the</strong> Washington Energy Conference Communiqué. <strong>The</strong>se<br />
directions <strong>of</strong> <strong>the</strong> Agreement may be summarized as follows:<br />
■ Members’ Objectives. <strong>The</strong> Preamble <strong>of</strong> <strong>the</strong> Agreement states <strong>the</strong><br />
principal objectives and a few <strong>of</strong> <strong>the</strong> considerations which led to <strong>the</strong><br />
establishment <strong>of</strong> <strong>the</strong> Agency [See Section C-4 above].<br />
■ Emergency Self-Sufficiency in Oil Supplies. Chapter I contains<br />
<strong>the</strong> Members’ oil emergency reserves commitment (stocks), initially<br />
fixed at <strong>the</strong> equivalent <strong>of</strong> sixty days <strong>of</strong> net oil imports, later raised to<br />
<strong>the</strong> current level <strong>of</strong> ninety days, and it sets forth associated rules on<br />
that subject.<br />
■ Demand Restraint. Chapter II states <strong>the</strong> obligation <strong>of</strong> Members to<br />
have ready a programme <strong>of</strong> contingent demand restraint measures<br />
sufficient to reduce oil consumption to meet <strong>the</strong> Agency’s emergency<br />
standards, and it contains rules to implement demand restraint.<br />
■ Allocation. Chapter III contains <strong>the</strong> technical treaty rules on <strong>the</strong><br />
system <strong>of</strong> oil allocation as part <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Emergency Sharing System,<br />
including <strong>the</strong> Members’ commitment to allocate available oil as<br />
foreseen in that System.<br />
■ Activation. Chapter IV provides <strong>the</strong> rules about <strong>the</strong> levels <strong>of</strong> oil<br />
supply shortfall sufficient to activate <strong>the</strong> Emergency Sharing System,<br />
outlines <strong>the</strong> procedures to be followed in triggering <strong>the</strong> System and<br />
applies a fail-safe mechanism when <strong>the</strong> Secretariat finds that <strong>the</strong><br />
actual or expected shortfall meets <strong>the</strong> I.E.P. trigger requirements. It<br />
also calls for oil industry consultation in <strong>the</strong> allocation process,<br />
carried out through <strong>the</strong> Industry Advisory Board [See Chapter V,<br />
Section 17(d) below], and sets out <strong>the</strong> procedure for deactivating <strong>the</strong><br />
System.<br />
■ Information Systems. Chapter V contains <strong>the</strong> rules for establishing<br />
and operating <strong>the</strong> Agency’s information systems designed to provide<br />
oil industry information generally and in relation specifically to<br />
expected or actual oil supply emergencies as provided in <strong>the</strong><br />
Agreement.<br />
■ Consultations with Oil Companies. Chapter VI sets up <strong>the</strong> <strong>IEA</strong><br />
“Framework <strong>of</strong> Consultations with Oil Companies” and provides<br />
procedural rules concerning <strong>the</strong> consultations.<br />
■ Long-Term Co-operation. Chapter VII states broadly <strong>the</strong> key<br />
elements <strong>of</strong> long-term policy to reduce dependence on imported oil;<br />
56
<strong>the</strong> detailed Long-Term Programme was adopted not in <strong>the</strong> I.E.P.<br />
Agreement itself, but in <strong>the</strong> Governing Board’s 1976 major decision<br />
on this subject.<br />
■ Relations with Producers and O<strong>the</strong>r Consumers. Chapter VIII<br />
contains broad rules concerning <strong>the</strong>se relations and gives <strong>the</strong> basic<br />
mandate to <strong>the</strong> <strong>IEA</strong>’s organ responsible for <strong>the</strong> Agency’s work in that<br />
sector, initially <strong>the</strong> Standing Group on Relations with Producer and<br />
O<strong>the</strong>r Consumer Countries, more recently <strong>the</strong> Committee on Non-<br />
Member Countries [See Chapter IV, Section D-2 below].<br />
■ Institutional and General Provisions. Chapter IX sets out <strong>the</strong><br />
composition and competence <strong>of</strong> <strong>the</strong> Governing Board and <strong>the</strong><br />
Standing Groups toge<strong>the</strong>r with <strong>the</strong> rules applicable to those bodies.<br />
Included also are provisions for <strong>the</strong> Secretariat, <strong>the</strong> voting system,<br />
relations with o<strong>the</strong>r entities, financial arrangements and special<br />
activities [See Chapters V-VIII below].<br />
■ Final Provisions. Chapter X contains <strong>the</strong> normal final clauses for<br />
international agreements <strong>of</strong> this kind toge<strong>the</strong>r with provisions<br />
concerning new Members, accession by <strong>the</strong> European Communities<br />
(European Union), amendments and general review <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement [See Chapter III below].<br />
During <strong>the</strong> period since signature, <strong>the</strong> I.E.P. Agreement has been amended<br />
only in three respects: to add language versions to <strong>the</strong> Agreement, to reflect<br />
changes brought about by <strong>the</strong> addition <strong>of</strong> new Members and to remove a<br />
date limitation on provisional application by new Members. At its meeting<br />
on 5-7 February 1975, <strong>the</strong> Governing Board adopted <strong>the</strong> French and<br />
German versions <strong>of</strong> <strong>the</strong> I.E.P. Agreement which had been signed in <strong>the</strong><br />
English version only [See <strong>IEA</strong>/GB(75)8, Item 9, Annex V]. Over <strong>the</strong> years<br />
Article 62 has been amended for each new Member, to add its name and<br />
voting weights, and to change <strong>the</strong> consequential voting weight totals and,<br />
when appropriate, <strong>the</strong> number <strong>of</strong> voting weights required for <strong>the</strong> two<br />
“special majorities” [<strong>the</strong> majorities required for decisions on certain issues<br />
under <strong>the</strong> Emergency Sharing System, discussed in Chapter V, Section A-13<br />
(c) and (d) below]. Article 71.3 was amended on <strong>20</strong>-21 May 1976 to make<br />
possible <strong>the</strong> provisional application <strong>of</strong> <strong>the</strong> Agreement by a new Member<br />
acceding after 1 May 1975, <strong>the</strong> original cut-<strong>of</strong>f date for <strong>the</strong> use <strong>of</strong> that<br />
procedure [See <strong>IEA</strong>/GB(76)24, Item 2, Annex I, paragraph 3(d)].<br />
O<strong>the</strong>rwise <strong>the</strong> I.E.P. Agreement as originally signed has not been amended.<br />
<strong>The</strong>re have been no amendments touching <strong>the</strong> substantive energy policy<br />
provisions <strong>of</strong> <strong>the</strong> Agreement.<br />
57
7. Governing Board Decision on <strong>the</strong> Program<br />
While <strong>the</strong> Council Decision was necessary to establish <strong>the</strong> Agency in <strong>the</strong><br />
OECD, and <strong>the</strong> I.E.P. Agreement was necessary to fix <strong>the</strong> international<br />
obligations <strong>of</strong> <strong>the</strong> Members and <strong>the</strong> terms <strong>of</strong> <strong>the</strong> Program, a means <strong>of</strong><br />
lodging <strong>the</strong> Program legally in <strong>the</strong> Agency itself was also required. That<br />
would be necessary for:<br />
■<br />
■<br />
■<br />
<strong>the</strong> Agreement to apply to <strong>the</strong> Agency as an entity;<br />
<strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency to be formally created with <strong>the</strong>ir respective<br />
memberships, powers, procedures and policy directives as contained<br />
in <strong>the</strong> Agreement; and<br />
all <strong>of</strong> <strong>the</strong> institutional arrangements in <strong>the</strong> Agreement to become<br />
operational.<br />
This was achieved when <strong>the</strong> Governing Board <strong>of</strong> <strong>the</strong> <strong>IEA</strong> adopted <strong>the</strong><br />
“Decision on <strong>the</strong> International Energy Program” on 18 November <strong>1974</strong> at<br />
its first meeting [<strong>IEA</strong>/GB(74)9(1st Revision), Item 4(a) and <strong>IEA</strong>/<br />
GB/DOC.74/5, Annex]. Under <strong>the</strong> operative part <strong>of</strong> that Decision, <strong>the</strong><br />
Governing Board<br />
DECIDES that:<br />
1. <strong>The</strong> International Energy Program set out in <strong>the</strong> Agreement<br />
[on an International Energy Program] is hereby adopted and<br />
shall be carried out by <strong>the</strong> Agency and Participating<br />
Countries in accordance with its terms;<br />
2. <strong>The</strong> organs provided for in <strong>the</strong> Program are hereby<br />
established as organs <strong>of</strong> <strong>the</strong> Agency; <strong>the</strong>y shall carry out<br />
<strong>the</strong>ir responsibilities in accordance with <strong>the</strong> procedures set<br />
out in <strong>the</strong> Program and shall take decisions, recommendations<br />
and o<strong>the</strong>r actions as provided <strong>the</strong>rein;<br />
3. <strong>The</strong> Participating Countries <strong>of</strong> <strong>the</strong> Agency shall fulfil <strong>the</strong><br />
obligations and enjoy <strong>the</strong> rights provided for in <strong>the</strong><br />
International Energy Program as set out in <strong>the</strong> Agreement.<br />
<strong>The</strong> Preamble <strong>of</strong> that Decision stated that: “all countries participating in <strong>the</strong><br />
Agency, in addition to becoming Signatory States to <strong>the</strong> Agreement, wish to<br />
adopt by this Decision <strong>the</strong> International Energy Program in <strong>the</strong> manner<br />
which creates legally binding rights and obligations in accordance with <strong>the</strong><br />
International Energy Program as set out in <strong>the</strong> Agreement”. In <strong>the</strong> lead-in<br />
to <strong>the</strong> operative part <strong>of</strong> <strong>the</strong> Decision, Members declared that <strong>the</strong>y were<br />
58
“Acting pursuant to <strong>the</strong> Decision <strong>of</strong> <strong>the</strong> Council, Article 4, which empowers<br />
<strong>the</strong> Governing Board, inter alia, to make decisions which shall, except as<br />
o<strong>the</strong>rwise provided, be binding upon Participating Countries and to<br />
delegate powers to o<strong>the</strong>r organs <strong>of</strong> <strong>the</strong> Agency”.<br />
<strong>The</strong> International Energy Program, which in effect is co-extensive<br />
with <strong>the</strong> I.E.P. Agreement, was thus adopted by <strong>the</strong> Members in a Decision<br />
<strong>of</strong> <strong>the</strong> Governing Board as well as in <strong>the</strong> Agreement itself. That decision<br />
incorporated by reference <strong>the</strong> terms <strong>of</strong> <strong>the</strong> Agreement in its entirety, making<br />
<strong>the</strong> Program binding on all <strong>IEA</strong> Members under <strong>the</strong> terms <strong>of</strong> <strong>the</strong> OECD<br />
Convention. <strong>The</strong> effect <strong>of</strong> this Governing Board Decision was to enact <strong>the</strong><br />
full Program within <strong>the</strong> Agency, for <strong>the</strong> purposes <strong>of</strong> internal organization, in<br />
parallel with <strong>the</strong> Agreement. <strong>The</strong> Decision also satisfied <strong>the</strong> requirements <strong>of</strong><br />
Article 13(b) <strong>of</strong> <strong>the</strong> Council Decision which enables a country to remain a<br />
Member <strong>of</strong> <strong>the</strong> Agency on <strong>the</strong> basis <strong>of</strong> <strong>the</strong> binding effect <strong>of</strong> <strong>the</strong> Program<br />
Decision (made under powers recognized in <strong>the</strong> Council Decision to make<br />
binding decisions) when <strong>the</strong> country is no longer in formal terms a party to<br />
<strong>the</strong> I.E.P. Agreement itself. That procedure was employed by Japan, which<br />
found itself sufficiently bound to <strong>the</strong> Program by virtue <strong>of</strong> <strong>the</strong> Council<br />
Decision and <strong>the</strong> <strong>IEA</strong> Program Decision so that it was unnecessary for Japan<br />
to duplicate <strong>the</strong> effect <strong>of</strong> those Decisions in <strong>the</strong> more formal procedure <strong>of</strong><br />
consenting to be bound by ratifying <strong>the</strong> I.E.P. specifically as such. <strong>The</strong><br />
Board’s Decision on <strong>the</strong> Program, quite useful for internal <strong>IEA</strong> purposes, did<br />
not affect <strong>the</strong> status <strong>of</strong> <strong>the</strong> I.E.P. Agreement in any way. <strong>The</strong> Agreement<br />
remains fully valid independently under <strong>the</strong> rules <strong>of</strong> international law.<br />
<strong>The</strong> events recounted in this Chapter began with <strong>the</strong> challenges <strong>of</strong> <strong>the</strong><br />
1973-<strong>1974</strong> crisis to <strong>the</strong> industrial countries and conclude with <strong>the</strong> institutional<br />
responses <strong>of</strong> <strong>the</strong>se countries. In order to reach that concluding point<br />
<strong>of</strong> institution building, <strong>the</strong> group <strong>of</strong> industrial countries had to identify <strong>the</strong>ir<br />
shared interests, establish <strong>the</strong> political will to act decisively upon <strong>the</strong>m,<br />
marshall <strong>the</strong> necessary technical, diplomatic, legal and political expertise,<br />
and seize <strong>the</strong> unique opportunity to combine <strong>the</strong>se elements into a process<br />
which would bring about a comprehensive and effective response to <strong>the</strong> new<br />
energy challenges. In <strong>1974</strong> <strong>the</strong> I.E.P. Agreement symbolized that response.<br />
<strong>The</strong> Agreement was itself <strong>the</strong> vital instrument for <strong>the</strong> realization <strong>of</strong> <strong>the</strong><br />
founders’ energy co-operation objectives. To <strong>the</strong> present day <strong>the</strong> Agreement<br />
continues to serve <strong>the</strong>se functions.<br />
59
CHAPTER III<br />
<strong>The</strong> I.E.P. Agreement <strong>of</strong> <strong>1974</strong><br />
<strong>The</strong> Agreement on an International Energy Program, signed on behalf <strong>of</strong><br />
<strong>the</strong> initial sixteen Member states on 18 November <strong>1974</strong>, reflected <strong>the</strong><br />
founders’ conviction that <strong>the</strong> Program should be established in an<br />
international treaty ra<strong>the</strong>r than in an instrument <strong>of</strong> lesser juridical standing.<br />
<strong>The</strong> most compelling reason for <strong>the</strong> treaty approach was <strong>the</strong> need to<br />
establish <strong>the</strong> Agency’s Emergency Sharing System, set out in <strong>the</strong> first five<br />
Chapters <strong>of</strong> <strong>the</strong> Agreement, in absolutely binding terms from a legal<br />
standpoint. In situations <strong>of</strong> oil supply disruptions presenting high economic<br />
and political stakes, it could not be excluded that states might be drawn<br />
into action which did not entirely conform to <strong>the</strong> interests <strong>of</strong> <strong>the</strong> group as a<br />
whole. Internal as well as external forces acting on <strong>the</strong> states might have<br />
disruptive effects in <strong>the</strong> course <strong>of</strong> a crisis, particularly a deep and prolonged<br />
crisis bringing severe suffering to <strong>the</strong>ir constituencies. At times <strong>the</strong> costs <strong>of</strong><br />
compliance with a system <strong>of</strong> oil sharing might be high. <strong>The</strong> short term<br />
interests <strong>of</strong> a country could run counter to respect for <strong>the</strong> interests <strong>of</strong> <strong>the</strong><br />
group as a whole. In some situations <strong>the</strong>re could be pressures by oil<br />
producers on selected Members. Or compliance might jeopardize o<strong>the</strong>r<br />
political objectives, leading industrial countries toward “beggar-myneighbour”<br />
ra<strong>the</strong>r than co-operative sharing actions. Although such<br />
difficulties were foreseeable, <strong>the</strong> founders could not allow <strong>the</strong>m to<br />
undermine <strong>the</strong> objectives <strong>of</strong> <strong>the</strong> new Agency. <strong>The</strong> <strong>IEA</strong>’s Sharing System<br />
could not function unless all Members respected <strong>the</strong>ir oil stocking and<br />
demand restraint commitments and carried out <strong>the</strong>ir oil sharing obligations<br />
fully and promptly when <strong>the</strong>y arose under <strong>the</strong> fail-safe <strong>IEA</strong> formulations.<br />
Since <strong>the</strong> founders had seen <strong>the</strong> divisive factors at work in various degrees<br />
during <strong>the</strong> 1973-<strong>1974</strong> crisis, <strong>the</strong>y naturally wished, in <strong>the</strong> application <strong>of</strong><br />
<strong>the</strong>ir political objective <strong>of</strong> sharing <strong>the</strong> available oil supplies, to minimize<br />
those potential risks to <strong>the</strong> integrity <strong>of</strong> <strong>the</strong> new emergency response system.<br />
During <strong>the</strong> 1973-<strong>1974</strong> crisis, experience with non-legally binding<br />
arrangements had not been particularly favourable. European Members <strong>of</strong><br />
61
<strong>the</strong> OECD had not performed fully on <strong>the</strong> political commitments <strong>the</strong>y had<br />
taken in <strong>the</strong> OECD Stocks Recommendation to maintain oil stocks for<br />
emergency purposes. Nor had it proved possible for those Members to find<br />
<strong>the</strong> political will to activate <strong>the</strong> loosely structured OECD Oil Apportionment<br />
Decision applicable to European Members <strong>of</strong> OECD [See Chapter II, Section<br />
A-3 above]. Coherent and effective sharing arrangements on a wider basis<br />
could not be put in place during <strong>the</strong> crisis. Thus it was evident that<br />
voluntary systems based on recommendations, declarations, or o<strong>the</strong>r nonlegally<br />
binding, imprecise or insufficiently developed arrangements could<br />
not always be expected to function properly in times <strong>of</strong> crisis. Since a<br />
system <strong>of</strong> commodity sharing in times <strong>of</strong> crisis is inherently one that<br />
distributes <strong>the</strong> burdens, no country could reasonably be expected to carry<br />
out a costly co-operative action unless it were satisfied that <strong>the</strong> strongest<br />
measures were in place to ensure that <strong>the</strong> o<strong>the</strong>r participants in <strong>the</strong> system<br />
would accept <strong>the</strong>ir shares <strong>of</strong> <strong>the</strong> overall burden and carry out <strong>the</strong>ir<br />
commitments under <strong>the</strong> system.<br />
<strong>The</strong> founders concluded that <strong>the</strong> best way to minimize <strong>the</strong>se problems<br />
was to use legally binding provisions on <strong>the</strong> key elements <strong>of</strong> <strong>the</strong> system and<br />
to embody those provisions in an international treaty, thus making <strong>the</strong><br />
commitments as formal, visible and convincing as possible. A treaty could<br />
be expected to assist Members with <strong>the</strong>ir own constituencies in times <strong>of</strong><br />
crisis. <strong>The</strong> adoption <strong>of</strong> legal undertakings would have <strong>the</strong> advantage <strong>of</strong><br />
placing <strong>the</strong>m within <strong>the</strong> international legal system and subjecting <strong>the</strong>m to<br />
incentives for compliance. Monitoring and administration would also be<br />
greatly facilitated, particularly with <strong>the</strong> advantage <strong>of</strong> <strong>the</strong> <strong>IEA</strong> reporting,<br />
reviewing and performance assessment capabilities. In that context, since<br />
<strong>the</strong> incentives for implementation would <strong>the</strong>n become readily apparent, <strong>the</strong><br />
Program would be much more effective than it might have been if<br />
established on political formulations with less formal standing than <strong>the</strong> legal<br />
arrangements which were adopted in <strong>the</strong> treaty.<br />
This Chapter examines particular treaty aspects <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement, reviews <strong>the</strong> international as well as national legal dimensions <strong>of</strong><br />
<strong>the</strong> Agreement and describes <strong>the</strong> mechanisms by which <strong>the</strong> Agreement was<br />
initially applied, entered into force, brought new Members into <strong>the</strong> Agency,<br />
and managed a number <strong>of</strong> treaty related questions, including territorial<br />
applications, amendments, disputes, interpretation, review and duration.<br />
Although <strong>the</strong>se considerations represent <strong>the</strong> more formal ra<strong>the</strong>r than energy<br />
policy aspects <strong>of</strong> <strong>the</strong> Agreement, <strong>the</strong>y provided <strong>the</strong> indispensable <strong>IEA</strong><br />
operational framework which constantly influenced <strong>the</strong> way that <strong>the</strong> Agency<br />
carried out its functions.<br />
62
A. Legal Status <strong>of</strong> <strong>the</strong> I.E.P. Agreement<br />
in International Law<br />
Although no question has ever been raised about <strong>the</strong> status <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement as a “treaty” in <strong>the</strong> technical sense <strong>of</strong> international law, it is<br />
useful to recall briefly <strong>the</strong> authority for that important characterization.<br />
Article 2.1(a) <strong>of</strong> <strong>the</strong> Vienna Convention on <strong>the</strong> Law <strong>of</strong> Treaties defines<br />
“treaty” for <strong>the</strong> purposes <strong>of</strong> <strong>the</strong> Convention as<br />
. . . an international agreement concluded between States in<br />
written form and governed by international law, whe<strong>the</strong>r<br />
embodied in a single instrument or in two or more related<br />
instruments and whatever its particular designation.<br />
<strong>The</strong> I.E.P. Agreement fits comfortably into that definition in every<br />
respect. Moreover, <strong>the</strong> Agreement is written in clearly stated legally<br />
binding form. <strong>The</strong> signatory governments, identified in <strong>the</strong> Preamble,<br />
state immediately before Article 1 that <strong>the</strong>y “HAVE AGREED as<br />
follows:. . .”. <strong>The</strong> term “Participating Countries”, employed throughout<br />
<strong>the</strong> Agreement to identify <strong>the</strong> Contracting Parties, is defined in Article<br />
1.2, to mean “States to which this Agreement applies provisionally and<br />
States for which <strong>the</strong> Agreement has entered into and remains in force”.<br />
Throughout <strong>the</strong> text <strong>of</strong> <strong>the</strong> Agreement <strong>the</strong> mandatory form “shall” is<br />
used to identify legally binding commitments, as in Article 2.1: “. . .each<br />
Participating Country shall maintain emergency reserves sufficient to<br />
sustain consumption for at least 60 days with no net oil imports” (later<br />
raised to 90 days); Article 5.1: each “shall at all times have ready a<br />
program <strong>of</strong> contingent oil demand restraint measures enabling it to<br />
reduce its rate <strong>of</strong> final consumption in accordance with Chapter IV”;<br />
Article 6.1: each “shall take <strong>the</strong> necessary measures in order that<br />
allocation <strong>of</strong> oil will be carried out pursuant to this Chapter and<br />
Chapter IV”, et cetera [Emphasis added; see Chapter IV, Section B-1<br />
below].<br />
<strong>The</strong> Vienna Convention, moreover, provides quite specifically for <strong>the</strong><br />
status <strong>of</strong> treaties establishing international organizations; i.e. intergovernmental<br />
organizations like <strong>the</strong> <strong>IEA</strong> [See Vienna Convention, Article 2.1(i)].<br />
Thus Article 5 <strong>of</strong> <strong>the</strong> Convention states:<br />
<strong>The</strong> present Convention applies to any treaty which is <strong>the</strong><br />
constituent instrument <strong>of</strong> an international organization . . .<br />
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<strong>The</strong> legally binding effect <strong>of</strong> a treaty such as <strong>the</strong> I.E.P. Agreement is<br />
confirmed in Articles 26 and 27 <strong>of</strong> <strong>the</strong> Convention which are reproduced in<br />
Chapter IV, Section B-1 below.<br />
B. Legal Effect <strong>of</strong> <strong>the</strong> I.E.P. Agreement in<br />
<strong>the</strong> National Law <strong>of</strong> Members<br />
While <strong>the</strong> I.E.P. Agreement created obligations for Members at <strong>the</strong><br />
international legal level, it was not <strong>the</strong> intention to do so directly at <strong>the</strong><br />
national level <strong>of</strong> Members’ internal law, not automatically so in any event.<br />
<strong>The</strong> Agreement states international obligations <strong>of</strong> governments, <strong>of</strong> <strong>the</strong><br />
Agency itself and <strong>of</strong> its organs; none <strong>of</strong> its provisions is addressed to<br />
companies, o<strong>the</strong>r entities or individuals. <strong>The</strong> Agency operates under <strong>the</strong><br />
notion that <strong>the</strong> two bodies <strong>of</strong> international and national law are separate.<br />
Since <strong>the</strong> Agreement is not considered to be “self-executing” (i.e. not<br />
automatically applicable as national law), implementing legislation (or<br />
o<strong>the</strong>r regulatory measures) was required in those countries in which <strong>the</strong><br />
governments had not been empowered independently to take <strong>the</strong> actions<br />
required by <strong>the</strong> Agreement. This conclusion follows not only from <strong>the</strong><br />
absence <strong>of</strong> self-executing language or intent, but also by implication from<br />
<strong>the</strong> Agreement language providing for its “provisional application”, i.e. its<br />
application prior to its entry into force following <strong>the</strong> deposit <strong>of</strong> <strong>the</strong> requisite<br />
number <strong>of</strong> consents to be bound [See Section G below] and from <strong>the</strong><br />
implementation provisions <strong>of</strong> Article 66, both <strong>of</strong> which will be discussed<br />
below. Although <strong>the</strong> Agreement does not apply by its terms directly as<br />
national law <strong>of</strong> <strong>the</strong> Members, in recent years <strong>the</strong> Members have reported to<br />
<strong>the</strong> Agency that in fact <strong>the</strong> necessary legislative authority for implementation<br />
<strong>of</strong> <strong>the</strong> Agreement is in place in all <strong>of</strong> <strong>the</strong>ir countries.<br />
“Provisional application” <strong>of</strong> <strong>the</strong> I.E.P. Agreement by all Signatory<br />
States was provided in Article 68.1 <strong>of</strong> <strong>the</strong> Agreement [See Section D,<br />
below]. This was a temporary arrangement to enable <strong>the</strong> Agency to<br />
function at <strong>the</strong> outset before <strong>the</strong> Agreement entered into force. During <strong>the</strong><br />
provisional application period, Members’ actions inconsistent with <strong>the</strong><br />
Agreement could be excused on <strong>the</strong> basis <strong>of</strong> national legal requirements.<br />
Once <strong>the</strong> Agreement entered into force, however, this legal relationship was<br />
to be reversed for Members which had given or would give <strong>the</strong>ir consents to<br />
be bound. For those Members (which now include all Members <strong>of</strong> <strong>the</strong><br />
Agency), legislative defenses were no longer available in cases where <strong>the</strong>ir<br />
64
actions might be constrained by internal legislation inconsistent with <strong>the</strong><br />
Agreement.<br />
<strong>The</strong>re is no provision in <strong>the</strong> Agreement making any <strong>of</strong> <strong>the</strong> commitments<br />
it contains subordinate to national law once <strong>the</strong> Member has given its consent<br />
to be bound. <strong>The</strong> commitments in <strong>the</strong> Agreement thus require Members to<br />
conform <strong>the</strong>ir national law to <strong>the</strong> terms <strong>of</strong> <strong>the</strong> Agreement. This is made<br />
specific for <strong>the</strong> <strong>IEA</strong> in Article 66 <strong>of</strong> <strong>the</strong> Agreement which states this as follows:<br />
IMPLEMENTATION OF THE AGREEMENT<br />
Article 66<br />
Each Participating Country shall take <strong>the</strong> necessary measures,<br />
including any necessary legislative measures, to implement this<br />
Agreement and decisions taken by <strong>the</strong> Governing Board.<br />
In practice this provision required all Members to have those implementing<br />
measures in place before giving <strong>the</strong>ir formal consent to be bound by <strong>the</strong><br />
Agreement and to maintain <strong>the</strong>m or fully conforming successive measures in<br />
force <strong>the</strong>reafter. Moreover, this provision confirmed <strong>the</strong> founders’ intention<br />
that in all Member countries <strong>the</strong> Agreement would not impose rules <strong>of</strong><br />
conduct directly on companies, o<strong>the</strong>r entities and individuals in <strong>the</strong> way<br />
that national legislation could. Although at <strong>the</strong> international level, in <strong>the</strong><br />
words <strong>of</strong> <strong>the</strong> Vienna Convention, “A party (meaning a state) may not<br />
invoke <strong>the</strong> provisions <strong>of</strong> its internal law as justification for its failure to<br />
perform a treaty” [Article 27], at <strong>the</strong> national level <strong>the</strong> I.E.P. Agreement is<br />
not binding directly on companies, o<strong>the</strong>r entities or individuals, but requires<br />
national level implementing measures in order to be binding upon <strong>the</strong>m.<br />
<strong>IEA</strong> Members report periodically on <strong>the</strong> state <strong>of</strong> readiness <strong>of</strong> <strong>the</strong>ir<br />
legislative and regulatory measures necessary to enable <strong>the</strong>m to carry out <strong>the</strong>ir<br />
commitments under <strong>the</strong> Agreement, and specifically under <strong>the</strong> Emergency<br />
Sharing System provisions. <strong>The</strong>se reports were compiled by <strong>the</strong> Secretariat at<br />
<strong>the</strong> request <strong>of</strong> <strong>the</strong> Standing Group on Emergency Questions(SEQ) in <strong>the</strong> form<br />
<strong>of</strong> two summary documents, one entitled “Draft Summary <strong>of</strong> Energy<br />
Emergency Legislation <strong>of</strong> <strong>IEA</strong> Countries” [<strong>IEA</strong>/SEQ(89)25(1st Revision)]<br />
and <strong>the</strong> second, “Member Countries’ Legislation, Administrative Procedures<br />
and Policy Attitudes Concerning <strong>the</strong> Use <strong>of</strong> Stocks in Supply Disruptions”<br />
[<strong>IEA</strong>/SEQ(89)26(2nd Revision)]. <strong>The</strong>se reports make it clear that <strong>the</strong><br />
implementing measures were adopted in basically three different modalities:<br />
(1) parliamentary action in connection with <strong>the</strong> ratification <strong>of</strong> <strong>the</strong> I.E.P.<br />
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Agreement, (2) specific legislation authorizing actions mandated by <strong>the</strong> I.E.P.<br />
Agreement and (3) energy legislation directed more generally to energy<br />
emergency problems. Most, if not all <strong>IEA</strong> Members have extensive legislation<br />
in <strong>the</strong> latter category. As shown in <strong>the</strong> two SEQ documents mentioned above,<br />
Members have in place <strong>the</strong> legislation necessary to carry out <strong>the</strong>ir Emergency<br />
Sharing System commitments.<br />
C. <strong>IEA</strong> Participating Countries, States,<br />
Signatory States and Governments<br />
<strong>The</strong> formal terms identified in <strong>the</strong> title <strong>of</strong> this Section need to be clarified<br />
because <strong>the</strong>y appear at various places in <strong>the</strong> I.E.P. Agreement and have<br />
given rise to questions about <strong>the</strong>ir respective roles in <strong>the</strong> <strong>IEA</strong> lexicon and <strong>the</strong><br />
various relations among <strong>the</strong>m. <strong>The</strong> essential point is that <strong>the</strong> Agreement, as<br />
stated in Article 1.2, has been entered into among “States” in <strong>the</strong><br />
international law sense <strong>of</strong> <strong>the</strong> term; that is, states established and<br />
recognized as such in <strong>the</strong> international system. In Chapter X <strong>of</strong> <strong>the</strong><br />
Agreement <strong>the</strong> parties to <strong>the</strong> Agreement are clearly identified as “States” or<br />
“Signatory States” or “acceding States”. <strong>The</strong> states are identified on <strong>the</strong><br />
signature pages <strong>of</strong> <strong>the</strong> Agreement not as “Governments” or “Participating<br />
Countries” but by <strong>the</strong> name <strong>of</strong> <strong>the</strong> state in each case. <strong>The</strong>re has never been<br />
any suggestion <strong>of</strong> <strong>the</strong> admission <strong>of</strong> non-state entities to <strong>IEA</strong> membership,<br />
although <strong>the</strong> European Communities (European Union) enjoy a particular<br />
status carrying <strong>the</strong> right to accede to <strong>the</strong> Agreement [See Chapter IV,<br />
Sections A and D-3 below].<br />
States are represented in international relations by <strong>the</strong>ir respective<br />
governments, and <strong>the</strong> term “<strong>The</strong> Governments” appears as <strong>the</strong> first words<br />
<strong>of</strong> <strong>the</strong> Preamble <strong>of</strong> <strong>the</strong> Agreement. Literally it is <strong>the</strong> governments which,<br />
immediately following <strong>the</strong> Preamble, “HAVE AGREED as follows”.<br />
However, <strong>the</strong> term “governments” is not defined or extensively employed.<br />
It gives way to <strong>the</strong> “Participating Countries” as <strong>the</strong> term <strong>of</strong> art used<br />
throughout <strong>the</strong> Agreement. Virtually all <strong>of</strong> <strong>the</strong> obligations <strong>of</strong> Members are<br />
taken in <strong>the</strong> name <strong>of</strong> “Participating Countries”, an expression better<br />
adapted to repeated usage in an Agreement <strong>of</strong> this kind than “States”.<br />
Article 1.2 resolves any questions about <strong>the</strong> meaning <strong>of</strong> “Participating<br />
Countries” by defining it to mean “States to which this Agreement applies<br />
provisionally and States for which <strong>the</strong> Agreement has entered into and<br />
remains in force”. So “Participating Countries” refers simply to <strong>the</strong> <strong>IEA</strong><br />
66
Member states. (Note that <strong>the</strong> term “Members” is <strong>of</strong>ten used in I.E.A.<br />
documentation and in this work as a convenient shorthand term in place <strong>of</strong><br />
“Participating Countries”, although <strong>the</strong> term “Members” is not employed in<br />
<strong>the</strong> Agreement to refer to <strong>IEA</strong> states, countries or governments).<br />
“Signatories” and “Signatory States” refer to <strong>the</strong> states on whose<br />
behalf <strong>the</strong> Agreement has actually been signed. In <strong>the</strong> case <strong>of</strong> this<br />
Agreement, that category consists only <strong>of</strong> <strong>the</strong> sixteen founding Members <strong>of</strong><br />
<strong>the</strong> Agency: Austria, Belgium, Canada, Denmark, Germany, Ireland, Italy,<br />
Japan, Luxembourg, <strong>The</strong> Ne<strong>the</strong>rlands, Spain, Sweden, Switzerland, Turkey,<br />
<strong>the</strong> United Kingdom and <strong>the</strong> United States. <strong>The</strong> Agreement was signed on<br />
behalf <strong>of</strong> <strong>the</strong> sixteen countries on 18 November <strong>1974</strong>; and <strong>the</strong>re were no<br />
later signatures as such because no provision was made for later signatures.<br />
<strong>The</strong> six countries which joined <strong>the</strong> Agency since that date (Australia,<br />
Finland, France, Greece, New Zealand and Portugal), are not Signatories in<br />
<strong>the</strong> technical sense, but are ra<strong>the</strong>r “acceding States” because <strong>the</strong>y each<br />
acceded to <strong>the</strong> I.E.P. Agreement in accordance with <strong>the</strong> Agreement’s<br />
provisions on that procedure [See Section H below]. Although Norway is<br />
considered as a Member for most purposes, it is nei<strong>the</strong>r a signatory nor an<br />
acceding State in technical terms, for its participation is regulated by special<br />
arrangements [See Chapter IV, Section A-3].<br />
Signature <strong>of</strong> <strong>the</strong> I.E.P. Agreement took place at an “Intergovernmental<br />
Meeting <strong>of</strong> Members” which immediately preceded <strong>the</strong> first<br />
Governing Board meeting on 18 November <strong>1974</strong>. At <strong>the</strong> Intergovernmental<br />
Meeting <strong>the</strong> OECD Secretary-General welcomed <strong>the</strong> representatives, who<br />
<strong>the</strong>n signed <strong>the</strong> Agreement. <strong>The</strong> Conclusions <strong>of</strong> that meeting appear<br />
with <strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong> first meeting <strong>of</strong> <strong>the</strong> Governing Board<br />
[<strong>IEA</strong>/GB(74)9(1st Revision), p. 1].<br />
D. Provisional Application<br />
Immediately upon signature <strong>of</strong> <strong>the</strong> Agreement, <strong>the</strong> Signatories were bound<br />
to apply <strong>the</strong> Agreement on a provisional basis. “Provisional application”<br />
played an important role at <strong>the</strong> outset <strong>of</strong> <strong>the</strong> <strong>IEA</strong> because it was understood<br />
that <strong>the</strong> Members’ constitutional procedures for giving <strong>the</strong>ir “consents to be<br />
bound” [See Section E below] would take a considerable period <strong>of</strong> time in<br />
some cases, but that <strong>the</strong> Program would have to become operational<br />
immediately. In order to avoid an expected delay <strong>of</strong> six months or longer<br />
(in <strong>the</strong> end it was about fourteen months) before <strong>the</strong> Agreement could enter<br />
67
into force definitively, <strong>the</strong> Members agreed in Article 68.1 on <strong>the</strong> “provisional<br />
application” <strong>of</strong> <strong>the</strong> Agreement as follows:<br />
Notwithstanding <strong>the</strong> provisions <strong>of</strong> Article 67, this Agreement shall<br />
be applied provisionally by all Signatory States, to <strong>the</strong> extent<br />
possible not inconsistent with <strong>the</strong>ir legislation, as from 18th November,<br />
<strong>1974</strong> following <strong>the</strong> first meeting <strong>of</strong> <strong>the</strong> Governing Board.<br />
Provisional application is specifically provided for in Article 25 <strong>of</strong> <strong>the</strong> Vienna<br />
Convention on <strong>the</strong> Law <strong>of</strong> Treaties. It had been employed successfully in a<br />
number <strong>of</strong> instruments establishing o<strong>the</strong>r intergovernmental organizations,<br />
including <strong>the</strong> Organisation for European Economic Co-operation (<strong>the</strong> OEEC,<br />
later transformed into <strong>the</strong> OECD) and in <strong>the</strong> GATT. It would also prove<br />
successful in <strong>the</strong> case <strong>of</strong> <strong>the</strong> <strong>IEA</strong> as an effective means <strong>of</strong> bridging <strong>the</strong> time<br />
gap between signature <strong>of</strong> <strong>the</strong> Agreement and its entry into force.<br />
<strong>The</strong> effect <strong>of</strong> <strong>the</strong> provisional application <strong>of</strong> <strong>the</strong> I.E.P. Agreement was<br />
to launch <strong>the</strong> Agency immediately upon signature, with virtually no delay in<br />
its initial operations. <strong>The</strong> first Governing Board meeting followed on <strong>the</strong><br />
same day as <strong>the</strong> signature. Members were specifically committed under <strong>the</strong><br />
terms <strong>of</strong> <strong>the</strong> Agreement to carry out <strong>the</strong> Program on a provisional basis to<br />
<strong>the</strong> extent that it was possible to do so under <strong>the</strong>ir existing legislation, an<br />
important advantage in view <strong>of</strong> <strong>the</strong> emergency preparedness mission <strong>of</strong> <strong>the</strong><br />
Agency and <strong>the</strong> potentially long period necessary for Members to carry out<br />
<strong>the</strong>ir constitutional procedures and for <strong>the</strong> Agreement to enter into force.<br />
At <strong>the</strong> outset all sixteen founding Signatories applied <strong>the</strong> Agreement<br />
provisionally under Article 68.1. <strong>The</strong> provisional application arrangement<br />
was later established also for Greece, New Zealand and Portugal in<br />
connection with <strong>the</strong>ir respective applications for accession to <strong>the</strong> Agreement<br />
[See Chapter IV, Section A-2 below]. That was carried out for acceding<br />
Members pursuant to Article 71.3 as amended, which provides this:<br />
Accession may take place on a provisional basis under <strong>the</strong><br />
conditions set out in Article 68, subject to such time limits as<br />
<strong>the</strong> Governing Board, acting by majority, may fix for an<br />
acceding State to deposit its notification <strong>of</strong> consent to be bound.<br />
In <strong>the</strong> o<strong>the</strong>r cases <strong>of</strong> accession, for Australia, Finland and France, <strong>the</strong>re was<br />
no provisional application, and <strong>the</strong> new Members deposited definitive<br />
instruments <strong>of</strong> accession without preceding <strong>the</strong>m with <strong>the</strong> deposit <strong>of</strong><br />
provisional instruments. In all cases <strong>of</strong> provisional application, time limits<br />
68
were fixed for deposit <strong>of</strong> <strong>the</strong> definitive instrument <strong>of</strong> accession. For founding<br />
Members <strong>the</strong> initial time limit was 1 May 1975, as fixed in Article 67.1 <strong>of</strong><br />
<strong>the</strong> Agreement, but that time limit proved to be too short. Consequently, on<br />
successive occasions <strong>the</strong> Board granted extensions <strong>of</strong> time in intervals varying<br />
from about three to six months until in each case <strong>the</strong> definitive instrument<br />
was deposited. <strong>The</strong> extensions were granted by <strong>the</strong> Board pursuant to Article<br />
67.4 <strong>of</strong> <strong>the</strong> Agreement.<br />
Provisional application under I.E.P. Agreement Article 68.2 continued<br />
until one <strong>of</strong> three events took place: (1) <strong>the</strong> Agreement definitively entered<br />
into force for <strong>the</strong> State concerned by deposit <strong>of</strong> <strong>the</strong> definitive consent to be<br />
bound, (2) <strong>the</strong> depositary received notification that <strong>the</strong> State concerned<br />
would not “consent to be bound” by <strong>the</strong> Agreement (i.e. gave notice that it<br />
would not ratify <strong>the</strong> Agreement), or (3) if <strong>the</strong> time limit for notification <strong>of</strong><br />
consent to be bound by <strong>the</strong> State concerned expired. For each <strong>IEA</strong> Member,<br />
<strong>the</strong> provisional application terminated upon <strong>the</strong> definitive entry into force <strong>of</strong><br />
<strong>the</strong> Agreement for <strong>the</strong> State concerned.<br />
<strong>The</strong> Signatories were fully able to meet <strong>the</strong>ir obligations under <strong>the</strong><br />
Agreement, including financial contribution obligations, during <strong>the</strong> period<br />
<strong>of</strong> provisional application which lasted from 18 November <strong>1974</strong> until <strong>the</strong><br />
Agreement entered into force on 19 January 1976 and until each Signatory<br />
had deposited its definitive consent to be bound. Acceding Members also<br />
performed <strong>the</strong>ir obligations fully during <strong>the</strong>ir respective periods <strong>of</strong><br />
provisional application. During those periods, <strong>the</strong> occasion did not arise<br />
for any Member country to seek to excuse non-performance <strong>of</strong> <strong>the</strong><br />
Agreement for its part, on account <strong>of</strong> <strong>the</strong> absence <strong>of</strong> legislative authority<br />
prior to <strong>the</strong> completion <strong>of</strong> its constitutional procedures. <strong>The</strong> provisional<br />
application rule thus made it possible for <strong>the</strong> Agency to advance its work<br />
during <strong>the</strong> initial period <strong>of</strong> its life when <strong>the</strong> Members were, in parallel<br />
actions, obtaining <strong>the</strong> necessary legislative authority to carry out <strong>the</strong><br />
Agreement on a more permanent basis. A membership chart showing <strong>the</strong><br />
dates <strong>of</strong> membership actions <strong>of</strong> all Members can be found in Appendix I.<br />
E. Consents to Be Bound<br />
In order for <strong>the</strong> I.E.P. Agreement to enter into force in <strong>the</strong> full sense <strong>of</strong> <strong>the</strong><br />
term for a Member, treaty rules and <strong>the</strong> Agreement itself require that <strong>the</strong> State<br />
give its “consent to be bound” to <strong>the</strong> Government <strong>of</strong> Belgium which serves as<br />
<strong>the</strong> depositary <strong>of</strong> <strong>the</strong> Agreement. Article 67.1 <strong>of</strong> <strong>the</strong> Agreement provides:<br />
69
Each Signatory State shall, not later than 1st May, 1975, notify <strong>the</strong><br />
Government <strong>of</strong> Belgium that, having complied with its<br />
constitutional procedures, it consents to be bound by this<br />
Agreement (Emphasis added).<br />
However, Article 67.1 does not specify <strong>the</strong> means by which <strong>the</strong> State’s consent is<br />
to be expressed. That specification is given in Article 11 <strong>of</strong> <strong>the</strong> Vienna<br />
Convention on <strong>the</strong> Law <strong>of</strong> Treaties, as follows: “<strong>The</strong> consent <strong>of</strong> a State to be<br />
bound by a treaty may be expressed by signature, exchange <strong>of</strong> instruments<br />
constituting <strong>the</strong> treaty, ratification, acceptance, approval or accession, or by any<br />
o<strong>the</strong>r means if so agreed.” <strong>The</strong> consents to be bound <strong>of</strong> most <strong>of</strong> <strong>the</strong> founding<br />
Signatory States were expressed by <strong>the</strong> deposit with <strong>the</strong> Government <strong>of</strong> Belgium,<br />
as depositary <strong>of</strong> <strong>the</strong> I.E.P. Agreement, <strong>of</strong> <strong>the</strong>ir respective instruments <strong>of</strong><br />
ratification [See Article 14 <strong>of</strong> <strong>the</strong> Vienna Convention]. In one case <strong>the</strong> alternative<br />
procedure provided in Article 13(b) <strong>of</strong> <strong>the</strong> OECD Council Decision on <strong>the</strong><br />
Establishment <strong>of</strong> <strong>the</strong> Agency was applied [See Chapter II, Section C-7 above].<br />
As indicated above in Section D, it was necessary for <strong>the</strong> Governing<br />
Board to grant extensions <strong>of</strong> time for deposit <strong>of</strong> <strong>the</strong> consents to be bound in<br />
cases <strong>of</strong> provisional application. Under Article 67.4 extensions may be<br />
granted by <strong>the</strong> Governing Board, acting by majority, upon <strong>the</strong> request <strong>of</strong> any<br />
Signatory State. <strong>The</strong> Members requesting time extensions were usually asked<br />
to explain <strong>the</strong> reasons for delay in completing <strong>the</strong>ir constitutional procedures<br />
and to complete <strong>the</strong>m at <strong>the</strong> earliest possible time, <strong>the</strong> Board agreeing on <strong>the</strong><br />
same occasion to review <strong>the</strong> situation at an early meeting <strong>of</strong> <strong>the</strong> Board [See for<br />
example <strong>IEA</strong>/GB(80)86, Item 7]. Time limits were also retained for New<br />
Zealand, Greece and Portugal which had <strong>the</strong> benefits <strong>of</strong> provisional accession,<br />
for those provisional benefits could not continue indefinitely. In <strong>the</strong> o<strong>the</strong>r<br />
cases <strong>of</strong> accession, for Australia, Finland and France, <strong>the</strong>re were no<br />
arrangements for provisional application or time limits, and <strong>the</strong>se new<br />
Members deposited definitive instruments <strong>of</strong> accession without preceding<br />
<strong>the</strong>m with <strong>the</strong> deposit <strong>of</strong> provisional instruments.<br />
For <strong>the</strong> Signatory States, <strong>the</strong> deposit <strong>of</strong> those instruments, toge<strong>the</strong>r with<br />
<strong>the</strong> entry into force <strong>of</strong> <strong>the</strong> Agreement under Article 67.2, completed <strong>the</strong><br />
formal actions for <strong>the</strong>m to be definitively bound by <strong>the</strong> terms <strong>of</strong> <strong>the</strong><br />
Agreement [See Section G below]. <strong>The</strong> deposit <strong>of</strong> <strong>the</strong> instrument for<br />
Signatory States could be made ei<strong>the</strong>r before or after <strong>the</strong> entry into force <strong>of</strong><br />
<strong>the</strong> Agreement. States which deposited <strong>the</strong>ir instruments by 9 January 1976<br />
became definitively bound on 19 January 1976. Signatories which deposited<br />
<strong>the</strong>ir instruments after 19 January 1976 became definitively bound ten days<br />
after <strong>the</strong> deposit was effected [See Appendix I].<br />
70
F. Absence <strong>of</strong> Reservations; Acceptance <strong>of</strong><br />
Declarations<br />
Reservations to <strong>the</strong> I.E.P. Agreement were <strong>the</strong>oretically possible under <strong>the</strong><br />
international law on this subject as codified in <strong>the</strong> Vienna Convention on<br />
<strong>the</strong> Law <strong>of</strong> Treaties. Article 2.1(d) defines <strong>the</strong> term as follows:<br />
‘reservation’ means a unilateral statement, however phrased or<br />
named, made by a State, when signing, ratifying, accepting,<br />
approving or acceding to a treaty, whereby it purports to<br />
exclude or to modify <strong>the</strong> legal effect <strong>of</strong> certain provisions <strong>of</strong> <strong>the</strong><br />
treaty in <strong>the</strong>ir application to that State.<br />
Article 19 <strong>of</strong> that Convention permits a State to formulate reservations when<br />
signing or ratifying a treaty unless <strong>the</strong> reservation is prohibited or excluded by<br />
<strong>the</strong> treaty or is “incompatible with <strong>the</strong> object and purpose <strong>of</strong> <strong>the</strong> treaty”. In<br />
<strong>the</strong> I.E.P. Agreement <strong>the</strong>re is no reference to reservations: <strong>the</strong>y are nei<strong>the</strong>r<br />
prohibited nor permitted expressly. While <strong>the</strong> formulation <strong>of</strong> reservations<br />
might have been <strong>the</strong>oretically possible, <strong>the</strong> general sense <strong>of</strong> <strong>the</strong> founders was<br />
that <strong>the</strong> Program was to be an integrated and balanced whole which would be<br />
disrupted by any reservations and that probably none could be made<br />
consistently with <strong>the</strong> “object and purpose” <strong>of</strong> <strong>the</strong> Agreement, certainly none<br />
that would reduce <strong>the</strong> Program to an à la carte selection process for Members.<br />
Hence no reservations were lodged at <strong>the</strong> time <strong>of</strong> signature and none at <strong>the</strong><br />
time <strong>of</strong> ratification by <strong>the</strong> founders or accession by <strong>the</strong> new Members.<br />
Although reservations were not made, <strong>the</strong>re was ample scope for<br />
Members to make “declarations” or statements without <strong>the</strong> intent or<br />
consequence <strong>of</strong> excluding or modifying <strong>the</strong> legal effect <strong>of</strong> any provision <strong>of</strong><br />
<strong>the</strong> Agreement. <strong>The</strong> declarations made at <strong>the</strong> time <strong>of</strong> signature on behalf <strong>of</strong><br />
Austria, Canada, <strong>The</strong> Ne<strong>the</strong>rlands, Spain, Sweden, Switzerland and Turkey<br />
are reproduced in <strong>IEA</strong>/GB(74)9(1st Revision), Annex I; <strong>the</strong> Governing<br />
Board’s action on <strong>the</strong>m appears in that document, Item 4(b) to (d). In its<br />
action on <strong>the</strong> declarations, <strong>the</strong> Board made it clear that <strong>the</strong>y contained no<br />
reservations or exceptions to <strong>the</strong> declarant States’ full acceptance <strong>of</strong> <strong>the</strong><br />
I.E.P. Agreement. In doing so <strong>the</strong> Board first noted <strong>the</strong> declarations<br />
generally, and <strong>the</strong>n noted specific responses to particular declarations, as<br />
follows [<strong>IEA</strong>/GB(74)9(1st Revision), Item 4(c) to (d):<br />
(c) upon receiving <strong>the</strong> declarations, <strong>the</strong> Governing Board<br />
(1) noted <strong>the</strong> declarations on <strong>the</strong> oil stock question by<br />
Austria and Turkey and concluded that <strong>the</strong> contents <strong>of</strong><br />
71
those declarations are consistent with <strong>the</strong> Agreement on<br />
an International Energy Program;<br />
(2) noted <strong>the</strong> declaration <strong>of</strong> Canada concerning <strong>the</strong><br />
Canadian constitutional system, <strong>the</strong> declaration <strong>of</strong> <strong>the</strong><br />
Ne<strong>the</strong>rlands concerning territorial application and <strong>the</strong><br />
declaration <strong>of</strong> Switzerland concerning Liechtenstein.<br />
(d) noted <strong>the</strong> declarations <strong>of</strong> Austria, Sweden and Switzerland,<br />
concerning <strong>the</strong>ir neutrality.<br />
It noted also that <strong>the</strong>se three States have determined that participation<br />
in <strong>the</strong> Agreement is consistent with <strong>the</strong>ir neutrality.<br />
<strong>The</strong> three states are acceding to <strong>the</strong> Agreement with all <strong>the</strong><br />
obligations which it contains and undertake to implement all<br />
parts <strong>of</strong> <strong>the</strong> Agreement.<br />
<strong>The</strong>ir commitment to achieve <strong>the</strong> purposes <strong>of</strong> <strong>the</strong> Agreement,<br />
and <strong>the</strong>ir determination to put it into force are not diminished<br />
by <strong>the</strong> declarations made at <strong>the</strong> time <strong>of</strong> signature.<br />
Hence none <strong>of</strong> those declarations constituted formal reservations to <strong>the</strong><br />
Agreement, and none <strong>of</strong> <strong>the</strong>m was repeated in <strong>the</strong> instruments <strong>of</strong> ratification<br />
which were subsequently deposited with <strong>the</strong> Government <strong>of</strong> Belgium. <strong>The</strong><br />
only founding Member <strong>of</strong> <strong>the</strong> <strong>IEA</strong> to deposit a declaration with <strong>the</strong><br />
depositary at <strong>the</strong> time <strong>of</strong> depositing its consent to be bound was Germany,<br />
which referred to <strong>the</strong> application <strong>of</strong> <strong>the</strong> I.E.P. Agreement to Berlin, to <strong>the</strong><br />
administration <strong>of</strong> stocks, to control <strong>of</strong> research and development and to <strong>the</strong><br />
relevant rights and responsibilities <strong>of</strong> <strong>the</strong> Allied authorities.<br />
At <strong>the</strong> time <strong>of</strong> admission <strong>of</strong> later Members, declarations were not<br />
made on behalf <strong>of</strong> Greece, New Zealand or Portugal, but were made on<br />
behalf <strong>of</strong> Australia, Finland and France. Australia referred to its federal<br />
constitution, to its foreign investment policy, to o<strong>the</strong>r relevant energy<br />
policies, and to its understandings concerning Chapters I-IV <strong>of</strong> <strong>the</strong><br />
Agreement (<strong>the</strong> oil Emergency Sharing System) on supply to certain non-<br />
Members and territories and on bunker fuel requirements for shipping.<br />
Australia also could not regard itself as bound by Chapter V <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s<br />
Long-Term Co-operation Programme entitled “Legislative and<br />
Administrative Obstacles and Discriminatory Practices” (for reasons largely<br />
parallel to those expressed by Australia in <strong>the</strong> OECD). In its Conclusions on<br />
<strong>the</strong> Australian declaration, <strong>the</strong> Board responded on <strong>the</strong> Long-Term point<br />
but did not consider that <strong>the</strong> o<strong>the</strong>r parts <strong>of</strong> <strong>the</strong> declaration required<br />
response [<strong>The</strong> declaration, an explanatory statement and <strong>the</strong> Board’s<br />
72
Conclusions are found in <strong>IEA</strong>/GB(79)8, Item 2 and Annex I]. <strong>The</strong><br />
declaration was mentioned in <strong>the</strong> Australian Instrument <strong>of</strong> Accession.<br />
While <strong>the</strong> Australian actions clearly constituted a reservation to <strong>the</strong> Board’s<br />
Long-Term Co-operation Programme decision, <strong>the</strong>y did not exclude or<br />
modify in any way <strong>the</strong> legal effects <strong>of</strong> <strong>the</strong> Agreement itself and were not<br />
considered as formal reservations to it.<br />
In <strong>the</strong> proceedings for <strong>the</strong> membership <strong>of</strong> Finland in 1991, <strong>the</strong><br />
Government <strong>of</strong> Finland made a declaration on neutrality. <strong>The</strong> response <strong>of</strong> <strong>the</strong><br />
Governing Board was made parallel to <strong>the</strong> Board’s response to <strong>the</strong> earlier<br />
declarations on that subject [<strong>the</strong> Finnish declaration appears in <strong>IEA</strong>/GB(91)5<br />
and <strong>the</strong> Board’s response in <strong>IEA</strong>/GB(91)19, Item 2(b)]. Like <strong>the</strong> o<strong>the</strong>r<br />
declarations on neutrality, <strong>the</strong> Finnish declaration was not treated as a<br />
reservation. France also made a statement in <strong>the</strong> course <strong>of</strong> its <strong>IEA</strong><br />
membership proceedings. Its statement concerned <strong>the</strong> additional time that<br />
might be required to complete <strong>the</strong> steps being taken to bring French<br />
emergency reserves up to <strong>the</strong> level required under <strong>the</strong> I.E.P. Agreement [this<br />
statement was noted by <strong>the</strong> Governing Board, <strong>IEA</strong>/GB(91)45, Item 2(b)].<br />
<strong>The</strong> French statement, like those made for o<strong>the</strong>r countries as described above,<br />
was not considered to constitute a formal reservation to <strong>the</strong> I.E.P. Agreement.<br />
G. Entry into Force<br />
I.E.P. Agreement Article 67.2 governed <strong>the</strong> initial entry into force <strong>of</strong> <strong>the</strong><br />
Agreement on 19 January 1976, some fourteen months after signature.<br />
Article 67.2 also provided for <strong>the</strong> deferment <strong>of</strong> entry into force until a<br />
critical minimum number <strong>of</strong> Members had given <strong>the</strong>ir consents to be bound:<br />
On <strong>the</strong> tenth day following <strong>the</strong> day on which at least six States<br />
holding at least 60 per cent <strong>of</strong> <strong>the</strong> combined voting weights<br />
mentioned in Article 62 have deposited a notification <strong>of</strong> consent<br />
to be bound or an instrument <strong>of</strong> accession, this Agreement shall<br />
enter into force for such States.<br />
<strong>The</strong> critical minimum was thus close to <strong>the</strong> number required to constitute a<br />
majority <strong>of</strong> Signatories when <strong>the</strong> Agency was established. When consents to<br />
be bound had been deposited by Canada, Denmark, Germany, Ireland,<br />
Japan, Luxembourg, Spain, Sweden, Switzerland, <strong>the</strong> United Kingdom and<br />
<strong>the</strong> United States on 9 January 1976, <strong>the</strong> requirements <strong>of</strong> Article 67.2 were<br />
73
satisfied. <strong>The</strong> United States was <strong>the</strong> last <strong>of</strong> this group. <strong>The</strong> 121 combined<br />
voting weights held by <strong>the</strong> eleven Members exceeded <strong>the</strong> required minimum<br />
<strong>of</strong> six countries holding 60 per cent <strong>of</strong> <strong>the</strong> combined voting weights at that<br />
time, and <strong>the</strong> group <strong>the</strong>n constituted more than a majority <strong>of</strong> <strong>the</strong> Signatories.<br />
<strong>The</strong> requirements <strong>of</strong> Article 67.2 thus being satisfied, <strong>the</strong> Agreement entered<br />
into force ten days later on 19 January for all Members which had given <strong>the</strong>ir<br />
consent to be bound by 9 January [See <strong>IEA</strong>/GB(76)13, Item 7(a)].<br />
For each Signatory which deposited its consent to be bound after<br />
9 January 1976, which was <strong>the</strong> case for Austria, Belgium, Italy, <strong>The</strong><br />
Ne<strong>the</strong>rlands, and Turkey, <strong>the</strong> Agreement entered into force on <strong>the</strong> tenth day<br />
following <strong>the</strong> deposit <strong>of</strong> <strong>the</strong> country’s consent to be bound [See Article<br />
67.3]. Parallel rules apply to accessions under Article 71.2. <strong>The</strong><br />
Agreement would enter into force for an acceding State on <strong>the</strong> tenth day<br />
following deposit <strong>of</strong> its instrument or on <strong>the</strong> date <strong>of</strong> entry into force <strong>of</strong> <strong>the</strong><br />
Agreement, whichever was later in time. Since none <strong>of</strong> <strong>the</strong> acceding States<br />
qualified before <strong>the</strong> entry into force <strong>of</strong> <strong>the</strong> Agreement, <strong>the</strong> effective date for<br />
each accession was <strong>the</strong> tenth day following <strong>the</strong> deposit <strong>of</strong> <strong>the</strong> State’s<br />
definitive instrument <strong>of</strong> accession [See Appendix I].<br />
H. Accession<br />
Accession to <strong>the</strong> I.E.P. Agreement is simply <strong>the</strong> procedure by which a State<br />
which is not a Signatory formally accepts and becomes bound by <strong>the</strong><br />
Agreement. Six States have acceded to <strong>the</strong> Agreement to date: Australia,<br />
Finland, France, Greece, New Zealand and Portugal. <strong>The</strong> procedure for<br />
accession and its legal effects are codified in Article 15 <strong>of</strong> <strong>the</strong> Vienna<br />
Convention on <strong>the</strong> Law <strong>of</strong> Treaties. As adopted for <strong>the</strong> <strong>IEA</strong>, accession<br />
procedures are found in I.E.P. Agreement Article 71. Paragraph 1 <strong>of</strong> that<br />
Article provides as follows:<br />
This Agreement shall be open for accession by any Member <strong>of</strong><br />
<strong>the</strong> Organisation for Economic Co-operation and Development<br />
which is able and willing to meet <strong>the</strong> requirements <strong>of</strong> <strong>the</strong><br />
Program. <strong>The</strong> Governing Board, acting by majority, shall<br />
decide on any request for accession.<br />
<strong>The</strong> conditions for accession are described in Chapter IV, Section A-2 below.<br />
As noted above, <strong>the</strong> Agreement authorized accession to take place on<br />
a provisional basis under <strong>the</strong> same conditions applied to Signatory States<br />
74
under Article 68 [See Section D above], “subject to such time limits<br />
as <strong>the</strong> Governing Board, acting by majority, may fix for an acceding<br />
State to deposit its notification <strong>of</strong> consent to be bound” [Article<br />
71.3]. Provisional application was established for Greece, New<br />
Zealand, and Portugal, and time limits <strong>of</strong> a number <strong>of</strong> months were<br />
fixed and extended as required. Definitive consents to be bound were<br />
deposited by each within <strong>the</strong> time limits as extended [See<br />
Appendix I].<br />
Rules on entry into force <strong>of</strong> <strong>the</strong> Agreement for acceding States are<br />
provided in Article 71.2 as follows:<br />
This Agreement shall enter into force for any State whose request<br />
for accession has been granted on <strong>the</strong> tenth day following <strong>the</strong><br />
deposit <strong>of</strong> its instrument <strong>of</strong> accession with <strong>the</strong> Government <strong>of</strong><br />
Belgium, or on <strong>the</strong> date <strong>of</strong> entry into force <strong>of</strong> <strong>the</strong> Agreement<br />
pursuant to Article 67, paragraph 2, whichever is <strong>the</strong> later.<br />
New Zealand was <strong>the</strong> only acceding State whose request for accession<br />
had been granted before <strong>the</strong> Agreement entered into force on 19 January<br />
1976, making it <strong>the</strong>oretically possible for its instrument <strong>of</strong> accession also<br />
to be deposited before entry into force <strong>of</strong> <strong>the</strong> Agreement, with <strong>the</strong><br />
consequence that New Zealand could have become a Member definitively<br />
on that date with <strong>the</strong> o<strong>the</strong>rs. However, <strong>the</strong> New Zealand instrument <strong>of</strong><br />
accession was not deposited until 29 December 1976, and its<br />
membership became fully effective ten days later. All <strong>of</strong> <strong>the</strong> o<strong>the</strong>r<br />
requests for accession were granted after <strong>the</strong> Agreement entered into<br />
force, and <strong>the</strong> membership <strong>of</strong> those States accordingly became definitive<br />
ten days after <strong>the</strong>ir respective accession instruments were deposited, as<br />
indicated in Appendix I.<br />
Each <strong>of</strong> <strong>the</strong> Governing Board’s decisions granting requests for<br />
accession was accompanied by a provision to <strong>the</strong> effect that <strong>the</strong> State’s<br />
accession to <strong>the</strong> Agreement would be deemed also to constitute <strong>the</strong> State’s<br />
accession to all <strong>of</strong> <strong>the</strong> decisions <strong>of</strong> <strong>the</strong> Governing Board which would be<br />
in force on <strong>the</strong> date <strong>of</strong> <strong>the</strong> deposit. Declaring an exception for Chapter V<br />
<strong>of</strong> <strong>the</strong> Long-Term Co-operation Programme, Australia was <strong>the</strong> only<br />
acceding State which found itself unable to accede to all <strong>of</strong> those<br />
decisions, but only for that exception. All <strong>of</strong> <strong>the</strong> o<strong>the</strong>r acceding States<br />
have acceded not only to <strong>the</strong> I.E.P. Agreement, but also without<br />
exception to all Governing Board decisions in force on <strong>the</strong> date <strong>of</strong> deposit<br />
<strong>of</strong> <strong>the</strong> accession instrument.<br />
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I. Right <strong>of</strong> Accession <strong>of</strong> <strong>the</strong> European<br />
Communities (European Union)<br />
<strong>The</strong> relations between <strong>the</strong> European Communities (EC) and <strong>the</strong> <strong>IEA</strong> fall<br />
into two distinct categories: (1) <strong>the</strong> operational relations which have been in<br />
place on a regular basis since <strong>the</strong> establishment <strong>of</strong> <strong>the</strong> Agency and continue<br />
to <strong>the</strong> present time, and (2) future relations which could be brought about<br />
by accession <strong>of</strong> <strong>the</strong> EC to <strong>the</strong> I.E.P. Agreement. <strong>The</strong> operational relations<br />
under which <strong>the</strong> EC has participated quite extensively in <strong>the</strong> work <strong>of</strong> <strong>the</strong><br />
Agency are described in Chapter IV, Section D-3 below. This Section is<br />
confined to <strong>the</strong> formal point <strong>of</strong> possible EC accession to <strong>the</strong> I.E.P.<br />
Agreement itself. While <strong>the</strong> designation “European Union” (EU) came into<br />
<strong>of</strong>ficial usage with <strong>the</strong> recent entry into force <strong>of</strong> <strong>the</strong> Treaty on European<br />
Union (commonly known as <strong>the</strong> “Maastricht Treaty”), <strong>the</strong> designations<br />
“European Communities” (EC) and <strong>the</strong> “Commission <strong>of</strong> <strong>the</strong> European<br />
Communities” (CEC) are retained in this <strong>History</strong>, since <strong>the</strong>y are employed<br />
in <strong>the</strong> applicable <strong>IEA</strong> and OECD instruments.<br />
<strong>The</strong> possibility <strong>of</strong> EC accession is expressly provided in I.E.P.<br />
Agreement Article 72 as follows:<br />
1. This Agreement shall be open for accession by <strong>the</strong> European<br />
Communities.<br />
2. This Agreement shall not in any way impede <strong>the</strong> fur<strong>the</strong>r<br />
implementation <strong>of</strong> <strong>the</strong> treaties establishing <strong>the</strong> European<br />
Communities.<br />
Moreover, Article 3 <strong>of</strong> <strong>the</strong> Council Decision Establishing <strong>the</strong> <strong>IEA</strong> provides that<br />
This Decision will be open for accession by <strong>the</strong> European<br />
Communities upon <strong>the</strong>ir accession to <strong>the</strong> Agreement in<br />
accordance with its terms.<br />
In parallel with <strong>the</strong> procedures for OECD Members to join <strong>the</strong> Agency, <strong>the</strong><br />
foregoing texts arguably envisage <strong>the</strong> possibility <strong>of</strong> <strong>the</strong> EC becoming a<br />
Member <strong>of</strong> <strong>the</strong> Agency upon its accession to <strong>the</strong> two instruments which<br />
established <strong>the</strong> <strong>IEA</strong> in <strong>the</strong> OECD, <strong>the</strong> I.E.P. Agreement and <strong>the</strong> Council<br />
Decision, although <strong>the</strong> precise effect <strong>of</strong> <strong>the</strong> texts quoted above on this<br />
subject is not altoge<strong>the</strong>r clear.<br />
During <strong>the</strong> <strong>1974</strong> Energy Co-ordinating Group (ECG) negotiations<br />
in Brussels, <strong>the</strong>re was a question about possible conflict between <strong>the</strong><br />
76
future I.E.P. Agreement and <strong>the</strong> treaties establishing <strong>the</strong> European<br />
Communities. Although <strong>the</strong> founders <strong>of</strong> <strong>the</strong> <strong>IEA</strong> did not identify specific<br />
points <strong>of</strong> conflict, <strong>the</strong>y sought to reduce <strong>the</strong> <strong>the</strong>oretical risks <strong>of</strong> conflict<br />
and possible opposition within <strong>the</strong> EC (particularly from an EC Member<br />
State which was not participating in <strong>the</strong> ECG), which led to <strong>the</strong> inclusion<br />
<strong>of</strong> Article 72. At that time EC accession was not considered to be a<br />
realistic possibility in <strong>the</strong> near future, but Article 72 was added to<br />
accommodate <strong>the</strong> possible convergence <strong>of</strong> energy policies <strong>of</strong> EC Member<br />
States at a later time, and <strong>the</strong>ir possible representation by <strong>the</strong> European<br />
Communities in <strong>the</strong> <strong>IEA</strong>.<br />
<strong>The</strong>re are major procedural differences between accession by States<br />
under Article 71 and accession by <strong>the</strong> EC under Article 72. In <strong>the</strong> former<br />
case an invitation by <strong>the</strong> Governing Board is necessary, and <strong>the</strong> new<br />
Member must be “able and willing to meet <strong>the</strong> requirements <strong>of</strong> <strong>the</strong><br />
Program” [Article 71.1]. For <strong>the</strong> EC <strong>the</strong>re is no requirement <strong>of</strong> a<br />
Governing Board invitation or <strong>of</strong> a showing <strong>of</strong> being “able and willing to<br />
meet <strong>the</strong> requirements <strong>of</strong> <strong>the</strong> Program”. <strong>The</strong>se differences, which doubtless<br />
had a sound political origin, left a number <strong>of</strong> questions to be resolved.<br />
Since <strong>the</strong> possibility <strong>of</strong> EC accession has received renewed attention in<br />
recent years, <strong>the</strong> unresolved questions need to be examined.<br />
Perhaps <strong>the</strong> most far-reaching <strong>of</strong> those questions would be <strong>the</strong> future<br />
relationship between <strong>the</strong> EC Member States and <strong>the</strong> Agency, as well as that<br />
between <strong>the</strong> EC and <strong>the</strong> Agency. After EC accession, would <strong>the</strong> Member<br />
States remain Members <strong>of</strong> <strong>the</strong> <strong>IEA</strong> but recede from active direct participation,<br />
leaving <strong>the</strong> EC to act as <strong>the</strong>ir spokesman in whole or part in <strong>IEA</strong> organs? Or<br />
would <strong>the</strong> individual Member States formally withdraw as <strong>IEA</strong> Members and<br />
be represented exclusively by <strong>the</strong> EC? A bare accession by <strong>the</strong> EC would not<br />
seem to change <strong>the</strong> institutional situation <strong>of</strong> <strong>the</strong> EC beyond its present status<br />
in <strong>the</strong> Agency, except perhaps to enlarge its role by delegation <strong>of</strong> power from<br />
<strong>the</strong> EC Member States for <strong>the</strong> EC to act as <strong>the</strong>ir spokesman. In that respect it<br />
may be questioned whe<strong>the</strong>r <strong>the</strong> Maastricht Treaty brought about any<br />
substantial change in <strong>the</strong> status <strong>of</strong> <strong>the</strong> EC, particularly in view <strong>of</strong> <strong>the</strong><br />
apparent absence <strong>of</strong> a specific basis for an EC common energy policy and <strong>the</strong><br />
presence in <strong>the</strong> Treaty’s Article B <strong>of</strong> <strong>the</strong> principle <strong>of</strong> “subsidiarity”.<br />
Any formal substitution <strong>of</strong> <strong>the</strong> EC Member States by <strong>the</strong> EC itself<br />
would raise a number <strong>of</strong> important institutional questions for <strong>the</strong> <strong>IEA</strong>,<br />
including:<br />
■ Obligations. I.E.P. Agreement obligations are taken by “Participating<br />
Countries” throughout <strong>the</strong> Agreement; “Participating Countries”<br />
77
■<br />
■<br />
■<br />
■<br />
are defined in Article 1 as “States to which this Agreement applies<br />
provisionally and States for which <strong>the</strong> Agreement has entered into<br />
and remains in force” [Emphasis added]. How would those<br />
obligations <strong>of</strong> “States” be made applicable to <strong>the</strong> EC?<br />
Ability to Carry out <strong>the</strong> Program. Although a demonstration <strong>of</strong> <strong>the</strong><br />
EC’s ability and willingness to carry out <strong>the</strong> Program is not formally<br />
required, and willingness may be inferred from <strong>the</strong> accession itself,<br />
<strong>the</strong>re remains a question about <strong>the</strong> ability <strong>of</strong> <strong>the</strong> EC to carry out key<br />
obligations, such as <strong>the</strong> oil stock, demand restraint, allocation, information<br />
and long-term provisions <strong>of</strong> <strong>the</strong> Agreement and Governing<br />
Board decisions.<br />
Voting. <strong>The</strong> right to vote is limited to Participating Countries which<br />
are enumerated in Article 62.2, with <strong>the</strong> number <strong>of</strong> votes assigned to<br />
each. Would <strong>the</strong> EC have votes in addition to <strong>the</strong> those <strong>of</strong> <strong>the</strong><br />
Member States? Or would <strong>the</strong> EC cast <strong>the</strong> established votes <strong>of</strong> its<br />
Member States, ei<strong>the</strong>r in <strong>the</strong>ir names or in its own name? Governing<br />
Board action would be required to resolve <strong>the</strong>se questions.<br />
<strong>IEA</strong> Financial arrangements. Those arrangements refer to <strong>the</strong> OECD<br />
scale <strong>of</strong> contributions which applies only to “Participating Countries”.<br />
What adjustments would have to be made to those arrangements?<br />
OECD Council Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> <strong>IEA</strong>. Would<br />
<strong>the</strong> Council Decision’s rules on contributions <strong>of</strong> Participating<br />
Countries and o<strong>the</strong>r subjects also have to be adapted for <strong>the</strong> EC?<br />
<strong>The</strong>oretically <strong>the</strong>re are a number <strong>of</strong> procedural means <strong>of</strong> bringing about <strong>the</strong><br />
necessary adjustments to <strong>the</strong> <strong>IEA</strong> institutional arrangements on <strong>the</strong><br />
foregoing subjects, once <strong>the</strong> desired outcome might be identified. If an<br />
Article 72 accession by <strong>the</strong> EC were envisaged, and follow-up arrangements<br />
were to be made, whe<strong>the</strong>r by formal amendment <strong>of</strong> <strong>the</strong> I.E.P. Agreement or<br />
by o<strong>the</strong>r and perhaps less burdensome and less time consuming procedural<br />
mechanisms (possibly a separate agreement between <strong>the</strong> <strong>IEA</strong> and <strong>the</strong> EC or<br />
accession by <strong>the</strong> EC to a Governing Board decision), <strong>the</strong>re would have to be<br />
a Governing Board consensus. While Article 72 does not formally require a<br />
Governing Board agreement on EC accession, <strong>the</strong> procedural steps<br />
necessary to arrange any formal substitution <strong>of</strong> <strong>the</strong> EC for its Member<br />
States would lead inexorably to <strong>the</strong> conclusion that a Governing Board<br />
consensus would be indispensable.<br />
Ano<strong>the</strong>r large question would be <strong>the</strong> ability <strong>of</strong> <strong>the</strong> EC to carry out <strong>the</strong><br />
I.E.P. Agreement commitments, even if textual changes were adopted or<br />
o<strong>the</strong>r arrangements were made. <strong>The</strong>re would doubtless be need for transfer<br />
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<strong>of</strong> authority from <strong>the</strong> Member States to <strong>the</strong> EC, not only on oil stock<br />
questions, but also on demand restraint, allocation, <strong>the</strong> data systems, <strong>the</strong><br />
Long-Term Programme and o<strong>the</strong>rs. Institutionally, <strong>the</strong> EC would ei<strong>the</strong>r<br />
have to be authorized to speak for <strong>the</strong> Member States (and cast <strong>the</strong>ir votes<br />
or express <strong>the</strong>ir consensus), or would have to displace <strong>the</strong>m entirely, for<br />
which end consensus in <strong>the</strong> Governing Board would have to be achieved.<br />
Up to <strong>the</strong> present time, it has not appeared that in ei<strong>the</strong>r <strong>the</strong> modalities<br />
or <strong>the</strong> scope <strong>of</strong> substitution <strong>of</strong> <strong>the</strong> Member States by <strong>the</strong> Commission in <strong>IEA</strong><br />
operations <strong>the</strong>re was sufficient consensus among <strong>the</strong> Member States to allow<br />
<strong>the</strong> Commission to approach <strong>the</strong> <strong>IEA</strong> directly on <strong>the</strong> accession question,<br />
although some informal soundings and contacts have taken place from time<br />
to time. In <strong>the</strong> meantime <strong>the</strong>re has been considerable reflection on this<br />
subject in <strong>IEA</strong> Member countries and within <strong>the</strong> Secretariat.<br />
J. Application to Territories<br />
<strong>The</strong> I.E.P. Agreement makes no exceptions to <strong>the</strong> general treaty rule that in<br />
<strong>the</strong> absence <strong>of</strong> a different intention “a treaty is binding upon each party in<br />
respect <strong>of</strong> its entire territory” [See Article 29 <strong>of</strong> <strong>the</strong> Vienna Convention on<br />
<strong>the</strong> Law <strong>of</strong> Treaties]. However, <strong>the</strong> Agreement does permit a Member to<br />
broaden <strong>the</strong> territorial scope <strong>of</strong> its commitments by extending <strong>the</strong> application<br />
<strong>of</strong> <strong>the</strong> Agreement to territories for whose international relations it is<br />
responsible or to territories within its frontiers for whose oil supplies it is<br />
legally responsible. <strong>The</strong> Agreement also contains territorial application<br />
provisions in a few technical rules <strong>of</strong> <strong>the</strong> Emergency Sharing System. To<br />
date, <strong>the</strong>re has been one major territorial change for a particular Member in<br />
<strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency. That change resulted from <strong>the</strong> unification <strong>of</strong><br />
Germany in 1990, by which rights and obligations <strong>of</strong> <strong>the</strong> Federal Republic<br />
became applicable with respect to <strong>the</strong> German Länder in <strong>the</strong> east.<br />
<strong>The</strong> provision on extension <strong>of</strong> <strong>the</strong> I.E.P. Agreement to territories is<br />
contained in Article 70:<br />
1. Any State may, at <strong>the</strong> time <strong>of</strong> signature, notification <strong>of</strong> consent<br />
to be bound in accordance with Article 67, accession or at any<br />
later date, declare by notification addressed to <strong>the</strong><br />
Government <strong>of</strong> Belgium that this Agreement shall apply to all<br />
or any <strong>of</strong> <strong>the</strong> territories for whose international relations it is<br />
responsible, or to any territories within its frontiers for whose<br />
oil supplies it is legally responsible.<br />
79
2. Any declaration made pursuant to paragraph 1 may, in<br />
respect <strong>of</strong> any territory mentioned in such declaration, be<br />
withdrawn in accordance with <strong>the</strong> provisions <strong>of</strong> Article 69,<br />
paragraph 2.<br />
At <strong>the</strong> time <strong>of</strong> signature, two declarations on territorial application were<br />
made, one by <strong>The</strong> Ne<strong>the</strong>rlands limiting <strong>the</strong> application <strong>of</strong> <strong>the</strong> Agreement to<br />
<strong>the</strong> territory <strong>of</strong> <strong>the</strong> Kingdom in Europe [<strong>IEA</strong>/GB(74)9(1st Revision) Annex<br />
I, p.16], and <strong>the</strong> o<strong>the</strong>r by Switzerland on <strong>the</strong> application <strong>of</strong> Chapters I to VI<br />
<strong>of</strong> <strong>the</strong> Agreement (<strong>the</strong> Chapters on <strong>the</strong> Emergency Sharing Systems,<br />
Information Systems and Oil Company Consultations) to Liechtenstein<br />
[<strong>IEA</strong>/GB(74)9(1st Revision) Annex I, p. <strong>20</strong>].<br />
In addition to <strong>the</strong> Agreement’s provision for declarations on territory,<br />
specific territorial references are contained in <strong>the</strong> Emergency Sharing<br />
System’s technical rules governing stocks and allocation. <strong>The</strong> emergency oil<br />
stockholding obligation <strong>of</strong> Members is not strictly territorial. Thus Article 3<br />
<strong>of</strong> <strong>the</strong> Annex to <strong>the</strong> Agreement provides that a Member may credit oil stocks<br />
held in ano<strong>the</strong>r country toward its oil stock commitment only if <strong>the</strong> o<strong>the</strong>r<br />
country agrees with <strong>the</strong> Member that it “shall impose no impediment to <strong>the</strong><br />
transfer <strong>of</strong> those stocks” to <strong>the</strong> Member. Stocks held within <strong>the</strong> Member’s<br />
country may not be counted if <strong>the</strong>y are held as international marine<br />
bunkers, since such bunkers are treated as exports under a 1976 Governing<br />
Board decision incorporated into <strong>the</strong> Emergency Management Manual<br />
(EMM) [4th Ed. 1982 p. 37]. <strong>The</strong> allocation provisions <strong>of</strong> <strong>the</strong> Agreement<br />
also contain territorial considerations, such as <strong>the</strong> territory on which an oil<br />
supply shortfall might occur and <strong>the</strong> maintenance <strong>of</strong> historical trade<br />
patterns in an emergency. Article 17.2 treats <strong>the</strong> territorial shortfall<br />
problem as follows: when <strong>the</strong> oil supply shortfall trigger situation occurs in<br />
“a major region” <strong>of</strong> a Member ra<strong>the</strong>r than in <strong>the</strong> Member’s over-all territory,<br />
in cases where <strong>the</strong> oil market is incompletely integrated, allocation is to take<br />
place under technical rules provided in that Article. <strong>The</strong> situation <strong>of</strong> non-<br />
Members is also considered. While <strong>the</strong> oil allocation rules in <strong>the</strong> Agreement<br />
do not extend formal rights to non-Members, Article 11.1 contains <strong>the</strong><br />
following language: “Historical oil trade patterns should be preserved as far<br />
as is reasonable, and due account should be taken <strong>of</strong> <strong>the</strong> position <strong>of</strong><br />
individual non-participating countries” (Emphasis added). <strong>The</strong> use <strong>of</strong><br />
“should” in those commitments indicates a clear intention that <strong>the</strong>se are<br />
recommendations to <strong>the</strong> Agency and its Members, but are not formally<br />
binding obligations. Never<strong>the</strong>less, those territorial recommendations are to<br />
be taken into account as appropriate in <strong>the</strong> allocation process.<br />
80
Germany has always presented a special territorial situation for <strong>the</strong><br />
Agency, because <strong>of</strong> Berlin and <strong>the</strong> former East German Länder. Following<br />
OECD practice, from <strong>the</strong> outset in <strong>1974</strong> <strong>the</strong> Agency has referred to <strong>the</strong><br />
Federal Republic simply as “Germany” and has included “Land Berlin” in<br />
accordance with <strong>the</strong> Declaration deposited with Belgium when Germany<br />
gave its consent to be bound by <strong>the</strong> I.E.P. Agreement in 1975; but <strong>the</strong><br />
Länder <strong>of</strong> <strong>the</strong> German Democratic Republic were not included before <strong>the</strong><br />
unification. On 3 October 1990 <strong>the</strong> two German States were united into a<br />
single sovereign State through <strong>the</strong> accession <strong>of</strong> <strong>the</strong> German Democratic<br />
Republic to <strong>the</strong> Federal Republic <strong>of</strong> Germany. On that day <strong>the</strong> OECD<br />
Council adopted a Resolution [C(90)143(Final)] extending to <strong>the</strong> unified<br />
Germany <strong>the</strong> OECD Convention and all Acts adopted by <strong>the</strong> Council<br />
applicable to Germany. <strong>The</strong> <strong>IEA</strong> took parallel action in respect <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement and <strong>the</strong> Acts <strong>of</strong> <strong>the</strong> Governing Board, as stated in <strong>the</strong> Board’s<br />
Conclusions <strong>of</strong> 31 October 1990 in which <strong>the</strong> Governing Board<br />
[<strong>IEA</strong>/GB(90)39, Item 5]<br />
(b) noted that <strong>the</strong> Agreement on an International Energy Program and<br />
all Acts <strong>of</strong> <strong>the</strong> Governing Board applicable to Germany also apply, as<br />
<strong>of</strong> 3rd October, 1990, to <strong>the</strong> territory incorporated into <strong>the</strong> Federal<br />
Republic <strong>of</strong> Germany as a result <strong>of</strong> <strong>the</strong> unification <strong>of</strong> Germany;<br />
(d) noted that <strong>the</strong> implications <strong>of</strong> German unification for <strong>the</strong> <strong>IEA</strong><br />
Budget, <strong>the</strong> Scale <strong>of</strong> Contributions and International Energy<br />
Program Agreement provisions, will be examined by <strong>the</strong><br />
Governing Board at a later meeting.<br />
While <strong>the</strong> territorial provisions <strong>of</strong> <strong>the</strong> I.E.P. Agreement are necessary to<br />
make <strong>the</strong> application <strong>of</strong> <strong>the</strong> Agreement clear, and to resolve political and<br />
technical questions in some cases, those provisions have not given rise to<br />
major problems. Over <strong>the</strong> years those provisions have been applied<br />
smoothly, and <strong>the</strong> necessary actions have been taken to ensure that <strong>the</strong><br />
Agency’s objectives and Members’ intentions have been realized.<br />
K. Amendments<br />
Under general rules, a treaty may be amended by agreement <strong>of</strong> <strong>the</strong> parties<br />
or in accordance with rules contained in <strong>the</strong> treaty itself [See Vienna<br />
Convention on <strong>the</strong> Law <strong>of</strong> Treaties, Articles 39 and 40]. Article 40 <strong>of</strong> <strong>the</strong><br />
81
Vienna Convention contains <strong>the</strong> rules applicable to multilateral treaties,<br />
including in paragraph 2 <strong>the</strong> rights <strong>of</strong> all parties to be notified <strong>of</strong><br />
amendment proposals and to take part in <strong>the</strong> decision on <strong>the</strong> action to be<br />
taken on <strong>the</strong> proposals and in <strong>the</strong> negotiation and conclusion <strong>of</strong> any<br />
agreement for <strong>the</strong> amendment <strong>of</strong> <strong>the</strong> treaty. Article 40.3 ensures that every<br />
State entitled to become a party to <strong>the</strong> treaty shall also be entitled to<br />
become a party to <strong>the</strong> treaty as amended. Those rules and o<strong>the</strong>rs in Article<br />
40 apply unless <strong>the</strong> treaty provides o<strong>the</strong>rwise.<br />
<strong>The</strong> Vienna Convention rules mean that all <strong>of</strong> <strong>the</strong> parties must agree<br />
to <strong>the</strong> treaty amendments or to <strong>the</strong> procedure by which amendments are to<br />
be adopted. In <strong>the</strong> case <strong>of</strong> <strong>the</strong> I.E.P. Agreement <strong>the</strong>re are two procedures, a<br />
general one, but also a more specific one for amending <strong>the</strong> voting rules<br />
on <strong>the</strong> occasion <strong>of</strong> membership changes or <strong>the</strong> periodic reviews under<br />
Article 62.5 and 62.6. <strong>The</strong> more general procedures are provided in Article<br />
73 as follows:<br />
This Agreement may at any time be amended by <strong>the</strong> Governing<br />
Board, acting by unanimity. Such amendment shall come into<br />
force in a manner determined by <strong>the</strong> Governing Board, acting<br />
by unanimity and making provision for Participating Countries<br />
to comply with <strong>the</strong>ir respective constitutional procedures.<br />
When compliance with a country’s constitutional procedures is a condition<br />
for <strong>the</strong> entry into force <strong>of</strong> an international agreement for that country, it is<br />
not unusual for amendments <strong>of</strong> <strong>the</strong> agreement to be made subject to <strong>the</strong><br />
same condition, as is <strong>the</strong> case for <strong>the</strong> <strong>IEA</strong> under Articles 67.1 and 71.2.<br />
<strong>The</strong> constitutional procedures rule does not apply, however, to<br />
amendment <strong>of</strong> <strong>the</strong> voting provisions under Articles 62.5 and 62.6 <strong>of</strong> <strong>the</strong><br />
Agreement, when membership changes occur or voting weight reviews are<br />
conducted. In deciding to amend those voting provisions, <strong>the</strong> Governing<br />
Board acts without <strong>the</strong> need for Members to obtain additional<br />
constitutional authority. <strong>The</strong> consent to be bound by <strong>the</strong> Agreement may<br />
thus be viewed as a consent to all future amendments on <strong>the</strong> voting<br />
questions in accordance with Articles 62.5 and 62.6. <strong>The</strong> voting rules<br />
have already been amended by <strong>the</strong> Governing Board in that fashion to<br />
reflect <strong>the</strong> changes required for <strong>the</strong> admission <strong>of</strong> <strong>the</strong> six new Members<br />
which joined <strong>the</strong> Agency after it was established. Article 62.7 requires,<br />
moreover, that any change in Article 62.2 (<strong>the</strong> voting weight table), 62.3<br />
(majority) and 62.4 (<strong>the</strong> two special majorities) “shall be based on <strong>the</strong><br />
concepts underlying those paragraphs and paragraph 6” (changes in<br />
82
voting weights based upon a Member’s oil consumption). This is discussed<br />
fur<strong>the</strong>r in Chapter V, Section A-13 below.<br />
Article 73 <strong>of</strong> <strong>the</strong> Agreement confers amendment powers on <strong>the</strong><br />
Governing Board, subject <strong>of</strong> course to <strong>the</strong> o<strong>the</strong>r relevant provisions <strong>of</strong> <strong>the</strong><br />
Agreement. For example, <strong>the</strong> adoption <strong>of</strong> amendments by “unanimity”<br />
means unanimity as defined in <strong>the</strong> Agreement. Article 62.1 states that<br />
“Unanimity shall require all <strong>of</strong> <strong>the</strong> votes <strong>of</strong> <strong>the</strong> Participating Countries<br />
present and voting” and that “Countries abstaining shall be considered as<br />
not voting” (Emphasis added). When applied to <strong>the</strong> adoption <strong>of</strong><br />
amendments, those rules constitute an agreed departure from <strong>the</strong> o<strong>the</strong>rwise<br />
applicable rule <strong>of</strong> international law; such a departure is permitted under <strong>the</strong><br />
Vienna Convention articles referred to above.<br />
In fact <strong>the</strong> I.E.P. Agreement has been amended to date only on a few<br />
occasions and for <strong>the</strong> following purposes only: (1) to add o<strong>the</strong>r language<br />
versions to <strong>the</strong> Agreement, (2) to reflect changes brought about by <strong>the</strong><br />
addition <strong>of</strong> new Members and (3) to remove a date limitation on<br />
provisional application by new Members. At its meeting on 5-7 February<br />
1975, <strong>the</strong> Governing Board adopted <strong>the</strong> French and German versions <strong>of</strong><br />
<strong>the</strong> I.E.P. Agreement which had been signed in <strong>the</strong> English version only<br />
[See <strong>IEA</strong>/GB(75)8, Item 9, Annex V]. Article 62 paragraphs 2 and 4 were<br />
amended for each new Member in order to add its name and voting<br />
weights, <strong>the</strong> consequential voting weight totals, and when appropriate, <strong>the</strong><br />
number <strong>of</strong> voting weights required for <strong>the</strong> two special majorities. Article<br />
71.3 was amended on <strong>20</strong>-21 May 1976 to make possible <strong>the</strong> provisional<br />
application <strong>of</strong> <strong>the</strong> Agreement by a new Member acceding after 1 May<br />
1975, <strong>the</strong> original cut-<strong>of</strong>f date for <strong>the</strong> use <strong>of</strong> that procedure [See<br />
<strong>IEA</strong>/GB(76)24, Item 2, Annex I, paragraph 3(d)]. O<strong>the</strong>rwise <strong>the</strong> I.E.P.<br />
Agreement as originally signed has not been amended. <strong>The</strong>re have been no<br />
amendments touching <strong>the</strong> substantive energy policy or operational<br />
provisions <strong>of</strong> <strong>the</strong> Agreement.<br />
While amendment by Governing Board decision is <strong>the</strong> established<br />
procedure for amending <strong>the</strong> Agreement, and no alternative means <strong>of</strong><br />
amendment have in fact been employed for that purpose to date, o<strong>the</strong>r<br />
possibilities do exist in <strong>the</strong> international system for amending a treaty.<br />
Indeed <strong>the</strong> most frequently employed procedure is amendment by a<br />
subsequent treaty, which may displace <strong>the</strong> first treaty in whole or in part.<br />
<strong>The</strong> amending treaty may be attached to <strong>the</strong> amended treaty as a protocol<br />
or <strong>the</strong> second treaty can stand on its own. <strong>The</strong> rules to be applied are<br />
contained in Articles 39-41 <strong>of</strong> <strong>the</strong> Vienna Convention. To date <strong>the</strong> <strong>IEA</strong> has<br />
yet to apply <strong>the</strong> protocol or amending treaty procedure.<br />
83
<strong>The</strong>re exist also less formal means for <strong>the</strong> Members to alter <strong>the</strong>ir<br />
working relationships without formalizing amendments to <strong>the</strong> treaty. An<br />
example <strong>of</strong> <strong>the</strong> less formal approach is seen in <strong>the</strong> association arrangements<br />
with Norway. In order to accommodate <strong>the</strong> special status <strong>of</strong> Norway as a<br />
non-Member, yet almost full participant in <strong>the</strong> <strong>IEA</strong> [See Chapter IV, Section<br />
A-3 below], <strong>the</strong> voting rules were not formally changed, but <strong>the</strong> Governing<br />
Board agreed that for <strong>the</strong> bulk <strong>of</strong> majority vote decisions in which Norway<br />
could participate, in effect <strong>the</strong> Members would vote in such a way as to give<br />
Norway <strong>the</strong> equivalent voting status <strong>of</strong> a full Member <strong>of</strong> <strong>the</strong> Agency. Such<br />
an arrangement on <strong>the</strong> application <strong>of</strong> <strong>the</strong> Members’ existing voting power<br />
did not constitute a formal amendment to <strong>the</strong> Agreement, but <strong>the</strong> result was<br />
a pragmatic solution permitting desired changes in relationships where<br />
required without undertaking <strong>the</strong> burdens <strong>of</strong> <strong>the</strong> more formal steps. That<br />
less formal adjustment has worked smoothly to all Members’ satisfaction<br />
since <strong>the</strong> arrangements were made with Norway in 1975.<br />
<strong>The</strong> I.E.P. Agreement established <strong>the</strong> key obligations <strong>of</strong> <strong>the</strong> Agency in a<br />
secure legal structure which would be difficult but not impossible to amend.<br />
<strong>The</strong> Agency countries <strong>the</strong>reby provided <strong>the</strong>mselves with a firm treaty based<br />
foundation for <strong>the</strong>ir reliance on each o<strong>the</strong>r’s performance <strong>of</strong> critical<br />
commitments on a vital area <strong>of</strong> economic life, in which <strong>the</strong>y had become<br />
increasingly interdependent. Although <strong>the</strong> conferring <strong>of</strong> amendment powers<br />
upon <strong>the</strong> Governing Board might facilitate changing <strong>of</strong> <strong>the</strong> Agreement, <strong>the</strong><br />
requirement <strong>of</strong> unanimity for such action assured Members <strong>of</strong> <strong>the</strong> continuing<br />
integrity <strong>of</strong> <strong>the</strong> Agreement and particularly <strong>of</strong> those elements, such as <strong>the</strong> oil<br />
supply emergency provisions, which were <strong>of</strong> principal importance to <strong>the</strong>m.<br />
L. Disputes<br />
<strong>The</strong> founders <strong>of</strong> <strong>the</strong> Agency chose not to provide in <strong>the</strong> I.E.P. Agreement for<br />
specific procedures which could be invoked for <strong>the</strong> settlement <strong>of</strong> disputes<br />
arising under <strong>the</strong> Agreement, and for most potential disputes <strong>of</strong> that kind<br />
no later action for that purpose has been taken by <strong>the</strong> Governing Board.<br />
Yet even a cursory view <strong>of</strong> <strong>the</strong> Agreement suggests that, at least from a<br />
<strong>the</strong>oretical viewpoint, it created considerable potential for disputes among<br />
<strong>the</strong> Members and o<strong>the</strong>rs, especially in <strong>the</strong> Emergency Sharing System.<br />
<strong>The</strong>re was <strong>the</strong> expectation that in an emergency a multitude <strong>of</strong> actions<br />
would have to be taken pursuant to <strong>the</strong> complex I.E.P. provisions and that<br />
<strong>the</strong> interests at stake could be quite significant in political and financial<br />
84
terms. Notwithstanding this potential for disputes, circumstances which<br />
could have led to disputes within <strong>the</strong> Agency have been adjusted in a<br />
satisfactory way without requests for formal dispute settlement procedures.<br />
In <strong>the</strong> interest <strong>of</strong> <strong>the</strong> integrity and reliability <strong>of</strong> <strong>the</strong> Emergency<br />
Sharing System, it became necessary for <strong>the</strong> <strong>IEA</strong> to employ all available<br />
means to avoid situations in which disputes might arise under that System.<br />
<strong>The</strong> most important <strong>of</strong> those means was <strong>the</strong> practice <strong>of</strong> substituting<br />
consensus for formal voting procedures (without amendment <strong>of</strong> <strong>the</strong><br />
Agreement or o<strong>the</strong>r formal arrangement). Consensus reduced <strong>the</strong><br />
possibilities <strong>of</strong> polarization and isolation <strong>of</strong> <strong>the</strong> minority, made workable<br />
compromises possible, and enhanced <strong>the</strong> atmosphere <strong>of</strong> co-operation in <strong>the</strong><br />
general interest [See Chapter V, Section A-13].<br />
<strong>The</strong> <strong>IEA</strong> Member governments clearly adopted a political ra<strong>the</strong>r than<br />
a legal approach to dealing with situations which might evolve into more<br />
formal disputes. Policy choices must be made in <strong>the</strong> course <strong>of</strong> resolving<br />
disputes which might arise under <strong>the</strong> System. For example, <strong>the</strong> Emergency<br />
Sharing System was designed at <strong>the</strong> outset in terms <strong>of</strong> broad concepts<br />
requiring definition and development. Even with <strong>the</strong> advantage <strong>of</strong> twenty<br />
years <strong>of</strong> refinement in which <strong>the</strong> Emergency Sharing System has been quite<br />
well developed, tested, and understood, <strong>the</strong> key concepts are still sufficiently<br />
broad to raise policy issues in potential dispute situations. <strong>IEA</strong> governments<br />
have preferred that those choices be made not by judges or arbitrators, but<br />
by policy authorities in <strong>the</strong> national administrations represented in <strong>the</strong> <strong>IEA</strong>.<br />
Under <strong>the</strong> inchoate state <strong>of</strong> international institutions in <strong>the</strong> twentieth<br />
century, <strong>the</strong>re was no compelling reason for <strong>the</strong> framers <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement to submit to <strong>the</strong> discipline <strong>of</strong> greater legal precision in <strong>the</strong><br />
Emergency Sharing System or to foresee a systematic submission <strong>of</strong> I.E.P.<br />
Agreement disputes to judges or arbitrators.<br />
<strong>The</strong>re were also more practical considerations which led to <strong>the</strong> political<br />
approach to conflict resolution. If <strong>the</strong> Emergency Sharing System were to<br />
serve its purposes promptly and effectively, a dispute settlement process could<br />
not be allowed to endanger <strong>the</strong> System. <strong>The</strong>refore, <strong>the</strong> System had to be kept<br />
free <strong>of</strong> <strong>the</strong> risks <strong>of</strong> legal constraints, delays or blockages. This is reflected in<br />
<strong>the</strong> assumed preference in <strong>the</strong> I.E.P. Agreement for <strong>the</strong> advantages <strong>of</strong> <strong>the</strong><br />
political process ra<strong>the</strong>r than for <strong>the</strong> advantages <strong>of</strong> certainty, precision, and <strong>the</strong><br />
more ideal justice that legal procedures might bring.<br />
Hence it comes as no surprise that dispute settlement procedures were<br />
not specifically dealt with at all in <strong>the</strong> Agreement; nor were <strong>the</strong>y as such<br />
discussed at any length in <strong>the</strong> I.E.P. preparatory work which took place in<br />
<strong>the</strong> Energy Co-ordinating Group at Brussels in <strong>the</strong> course <strong>of</strong> <strong>1974</strong>. While a<br />
85
number <strong>of</strong> I.E.P. provisions were designed to help shape <strong>the</strong> resolution <strong>of</strong><br />
policy disagreements within <strong>the</strong> Agency, and some <strong>of</strong> <strong>the</strong>se will be discussed<br />
below, <strong>the</strong>re was no specific provision for <strong>the</strong> resolution <strong>of</strong> disputes <strong>of</strong> a<br />
legal nature over questions <strong>of</strong> interpretation <strong>of</strong> <strong>the</strong> Agreement, over<br />
competence <strong>of</strong> <strong>the</strong> various <strong>IEA</strong> bodies, over <strong>the</strong> validity <strong>of</strong> unprecedented<br />
actions to be taken by <strong>the</strong> Secretariat, or over compliance by governments<br />
with <strong>the</strong>ir new I.E.P. obligations. Nor did <strong>the</strong> founders provide for <strong>the</strong><br />
resolution <strong>of</strong> disputes which might arise between <strong>the</strong> co-operating oil<br />
companies and <strong>the</strong> Agency or governments or o<strong>the</strong>r companies.<br />
<strong>The</strong> sense <strong>of</strong> <strong>the</strong> Energy Co-ordinating Group was that legal as well as<br />
political disagreements among <strong>the</strong> various participants would have to be<br />
resolved in accordance with <strong>the</strong> future decisions <strong>of</strong> <strong>the</strong> Governing Board,<br />
which is <strong>the</strong> highest level decision-making body <strong>of</strong> <strong>the</strong> Agency. Such<br />
questions as whe<strong>the</strong>r <strong>the</strong> Governing Board’s actions concerning disputes<br />
would be a case-by-case process or whe<strong>the</strong>r <strong>the</strong> Board would establish<br />
separate mechanisms for dispute resolution were not explicitly addressed.<br />
Nor would it have been feasible for <strong>the</strong> founders to write into <strong>the</strong> I.E.P.<br />
Agreement a comprehensive dispute settlement mechanism while <strong>the</strong>re was<br />
clearly a more urgent need to proceed with broader questions <strong>of</strong> policy.<br />
Fur<strong>the</strong>rmore, it would have been difficult at that early date to make a<br />
thorough analysis <strong>of</strong> <strong>the</strong> kinds <strong>of</strong> disputes which might arise under <strong>the</strong><br />
Emergency Sharing System, and it would have been quite impossible to<br />
foresee <strong>the</strong> nature <strong>of</strong> disputes in those sectors which would be developed<br />
only after <strong>the</strong> Agency had become fully operational.<br />
Institutional obstacles to <strong>the</strong> use <strong>of</strong> judicial or arbitral remedies also<br />
exist. No court, whe<strong>the</strong>r national or international, has been granted<br />
general jurisdiction over <strong>the</strong> parties or <strong>the</strong> subject matter <strong>of</strong> judicial actions<br />
which might be instituted, and no such jurisdiction, much less consent by<br />
<strong>the</strong> parties, has been given for arbitration proceedings specifically<br />
concerning <strong>the</strong> types <strong>of</strong> issues which could arise under <strong>the</strong> I.E.P.<br />
Agreement. While some Members may have agreed broadly on judicial or<br />
arbitral mechanisms which could <strong>the</strong>oretically include <strong>IEA</strong> issues, for<br />
example under <strong>the</strong> arbitration clauses contained in <strong>IEA</strong> energy R & D<br />
Implementing Agreements, no Member has invoked those clauses or o<strong>the</strong>r<br />
mechanisms on an adversarial basis in deliberations <strong>of</strong> <strong>IEA</strong> bodies.<br />
Ano<strong>the</strong>r element which works against formal dispute settlement<br />
procedures is <strong>the</strong> fact that <strong>the</strong> <strong>IEA</strong> Secretariat and <strong>the</strong> Governing Board are<br />
fully sheltered against dispute resolution proceedings. <strong>The</strong>y are each<br />
internal creations <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, having no independent legal capacity or<br />
standing under <strong>the</strong> I.E.P. Agreement or under national legislation<br />
86
implementing <strong>the</strong> I.E.P. Agreement. Nothing in <strong>the</strong> I.E.P. Agreement establishes<br />
any remedy against actions <strong>of</strong> <strong>the</strong> Secretariat or <strong>the</strong> Governing Board, and it<br />
would be only with great difficulty that one could imagine what appropriate and<br />
effective legal remedies might be fashioned. <strong>The</strong> Secretariat, following normal<br />
international practice, is responsible solely to <strong>the</strong> principal organ <strong>of</strong> <strong>the</strong> Agency,<br />
in this case <strong>the</strong> Governing Board, which in turn is fully empowered to make all<br />
decisions necessary for <strong>the</strong> establishment and <strong>the</strong> functioning <strong>of</strong> <strong>the</strong> Secretariat.<br />
<strong>The</strong>re is virtually no institutional control on actions by <strong>the</strong> Governing Board.<br />
Moreover, <strong>the</strong> Executive Director <strong>of</strong> <strong>the</strong> Agency, as well as <strong>the</strong> members <strong>of</strong> <strong>the</strong><br />
Staff and <strong>the</strong> government representatives serving on <strong>the</strong> Governing Board or in<br />
o<strong>the</strong>r bodies <strong>of</strong> <strong>the</strong> Agency, are granted immunity from legal process under<br />
OECD rules. As an autonomous agency <strong>of</strong> <strong>the</strong> OECD, <strong>the</strong> <strong>IEA</strong> not only enjoys<br />
<strong>the</strong> benefits <strong>of</strong> <strong>the</strong> OECD’s legal capacity and standing to appear in judicial and<br />
arbitral proceedings, but also enjoys <strong>the</strong> full immunity from legal process which<br />
is customary for international organizations. <strong>The</strong>se immunities could be<br />
waived, <strong>of</strong> course, as could <strong>the</strong> immunities <strong>of</strong> governments under public<br />
international law, but <strong>the</strong>re is no indication <strong>of</strong> any disposition to request or<br />
effect such waivers ei<strong>the</strong>r generally or on a case-by-case basis.<br />
On <strong>the</strong> international level, no institutional device has been established<br />
for <strong>the</strong> <strong>IEA</strong> (or <strong>the</strong> OECD generally or any OECD body) to participate in<br />
international judicial proceedings such as <strong>the</strong> advisory opinion process<br />
available in <strong>the</strong> International Court <strong>of</strong> Justice for United Nations institutions.<br />
No agreements have been made for arbitration <strong>of</strong> <strong>the</strong> <strong>IEA</strong> institutional type<br />
issues now under consideration, not even in <strong>the</strong> <strong>IEA</strong>’s Dispute Settlement<br />
Centre which <strong>of</strong>fers, under carefully designed conditions and limitations, a<br />
highly developed instrument <strong>of</strong> arbitration available to <strong>the</strong> co-operating oil<br />
companies. Great care was exercised to limit <strong>the</strong> jurisdiction <strong>of</strong> <strong>the</strong> Centre in<br />
such a way as to exclude consideration <strong>of</strong> <strong>the</strong>se issues and to prevent <strong>the</strong><br />
<strong>IEA</strong>, its organs, <strong>the</strong> Secretariat, or Member governments from being parties<br />
to arbitration proceedings conducted under <strong>the</strong> auspices <strong>of</strong> <strong>the</strong> Centre. With<br />
this avenue foreclosed and with o<strong>the</strong>r judicial and arbitration possibilities<br />
excluded for various reasons, it is clear that disputes arising under <strong>the</strong> I.E.P.<br />
Agreement are, under existing arrangements, subject to conflict resolution<br />
principally by means <strong>of</strong> <strong>the</strong> political process.<br />
M. Interpretation<br />
<strong>The</strong> I.E.P. Agreement is silent not only on <strong>the</strong> procedures for dispute<br />
resolution but also on <strong>the</strong> means <strong>of</strong> interpretation <strong>of</strong> <strong>the</strong> Agreement, a<br />
87
question which is <strong>of</strong>ten presented in disputes under international treaties.<br />
Like o<strong>the</strong>r disputed questions, as indicated above in Section L, in <strong>the</strong> <strong>IEA</strong><br />
questions <strong>of</strong> interpretation are more subject to political than strictly<br />
juridical means <strong>of</strong> resolution. In <strong>the</strong> absence <strong>of</strong> interpretation rules in <strong>the</strong><br />
Agreement itself, those questions are governed by <strong>the</strong> general treaty rules <strong>of</strong><br />
international law. <strong>The</strong> basic rule is provided in Article 31.1 <strong>of</strong> <strong>the</strong> Vienna<br />
Convention on <strong>the</strong> Law <strong>of</strong> Treaties:<br />
A treaty shall be interpreted in good faith in accordance with<br />
<strong>the</strong> ordinary meaning to be given to <strong>the</strong> terms <strong>of</strong> <strong>the</strong> treaty in<br />
<strong>the</strong>ir context and in <strong>the</strong> light <strong>of</strong> its object and purpose.<br />
Article 31 <strong>of</strong> <strong>the</strong> Vienna Convention contains rules concerning “context” referred<br />
to in <strong>the</strong> quotation <strong>of</strong> paragraph 1 above. <strong>The</strong> “context” to be taken into<br />
account includes, in addition to <strong>the</strong> text itself, <strong>the</strong> Preamble <strong>of</strong> <strong>the</strong> Agreement<br />
and annexes as well as certain o<strong>the</strong>r agreements and instruments. O<strong>the</strong>r rules<br />
refer to subsequent treaties, practice and relevant rules <strong>of</strong> international law.<br />
When intended by <strong>the</strong> parties, special meanings are to be given to treaty terms.<br />
Rules are provided in Article 32 for recourse to supplementary means <strong>of</strong> interpretation,<br />
including preparatory work. <strong>The</strong>se and o<strong>the</strong>r Convention rules provide<br />
useful and authoritative guidance on interpretation <strong>of</strong> <strong>the</strong> Agreement.<br />
In <strong>the</strong> special cases <strong>of</strong> treaties establishing international organizations<br />
<strong>the</strong>re is, moreover, a particularly important rule <strong>of</strong> interpretation which has<br />
been applied by <strong>the</strong> International Court <strong>of</strong> Justice. That rule was formulated<br />
as follows for <strong>the</strong> United Nations:<br />
. . . <strong>the</strong> rights and duties <strong>of</strong> an entity such as <strong>the</strong> Organization<br />
must depend upon its purposes and functions as specified or<br />
implied in its constituent documents and developed in practice.<br />
and<br />
Under international law, <strong>the</strong> Organizations must be deemed to<br />
have those powers which, though not expressly provided in <strong>the</strong><br />
Charter, are conferred upon it by necessary implication as being<br />
essential to <strong>the</strong> performance <strong>of</strong> its duties . . . [See <strong>the</strong> Advisory<br />
Opinion <strong>of</strong> <strong>the</strong> International Court <strong>of</strong> Justice in Reparation for<br />
Injuries Suffered in <strong>the</strong> Service <strong>of</strong> <strong>the</strong> United Nations, I.C.J.<br />
Reports (1949) pp. 174, 180, 182 ].<br />
and<br />
. . . when <strong>the</strong> Organization takes action which warrants <strong>the</strong><br />
assertion that it was appropriate for <strong>the</strong> fulfilment <strong>of</strong> one <strong>of</strong> <strong>the</strong><br />
88
stated purposes <strong>of</strong> <strong>the</strong> United Nations, <strong>the</strong> presumption is that<br />
such action is not ultra vires <strong>the</strong> Organization [See Certain<br />
Expenses <strong>of</strong> <strong>the</strong> United Nations (Article 17, paragraph 2, <strong>of</strong> <strong>the</strong><br />
Charter) (Advisory Opinion), I.C.J. Reports (1962) 151, 168].<br />
<strong>The</strong> foregoing statements <strong>of</strong> what has been characterized as <strong>the</strong> rule <strong>of</strong><br />
“institutional effectiveness” [See for example, Brownlie, Principles <strong>of</strong> Public<br />
International Law, 4th Ed. 1990 p. 705] correspond to <strong>the</strong> Governing<br />
Board’s approach to <strong>the</strong> application <strong>of</strong> <strong>the</strong> I.E.P. Agreement and <strong>the</strong><br />
principles <strong>of</strong> flexibility, operational efficiency and simplicity adopted by <strong>the</strong><br />
Board at its first meeting [See Chapter VIII below]. In numerous cases, <strong>the</strong><br />
Governing Board has appeared to apply <strong>the</strong> international law principles,<br />
including <strong>the</strong> rule <strong>of</strong> “institutional effectiveness”, but always tacitly without<br />
express reference to <strong>the</strong> fact that <strong>the</strong> Agreement was in effect being<br />
interpreted by <strong>the</strong> decision being taken.<br />
Examples <strong>of</strong> Governing Board action or acquiesence containing tacit<br />
interpretations <strong>of</strong> <strong>the</strong> I.E.P. Agreement may be found in <strong>the</strong> application <strong>of</strong><br />
<strong>the</strong> following powers:<br />
■<br />
■<br />
■<br />
■<br />
<strong>the</strong> Governing Board’s power to dispense with rules <strong>of</strong> procedure: in<br />
exercising that power in <strong>1974</strong> [See Chapter V, Section A-8], <strong>the</strong><br />
Board in effect interpreted <strong>the</strong> words “shall adopt its own rules <strong>of</strong><br />
procedure” [Article 50.2] to be permissive, not mandatory;<br />
<strong>the</strong> Agency’s power to enter into an international agreement: in<br />
authorizing <strong>the</strong> Agreement Between <strong>the</strong> Agency and <strong>the</strong> Government<br />
<strong>of</strong> Norway in 1975 [See Chapter IV, Section D-4], <strong>the</strong> Board tacitly<br />
applied <strong>the</strong> “institutional effectiveness” rule to find an implied<br />
international legal capacity to enter into such an international instrument;<br />
<strong>the</strong> Governing Board’s power to act beyond <strong>the</strong> 1 July 1975 deadlines<br />
set in Articles 2.2, 3.2, 18, 43 and Annex Article 9 as well as <strong>the</strong> 30<br />
or 60 day deadlines set in Articles 29, 34 and 37 on various occasions<br />
in and after 1975, tacitly interpreting those provisions as setting<br />
targets, not deadlines on competence;<br />
<strong>the</strong> Executive Director’s power to decline to make <strong>the</strong> “finding”: in<br />
acknowledging tacitly <strong>the</strong> Executive Director’s exercise <strong>of</strong> that power<br />
and thus for <strong>the</strong> Emergency Sharing System not to be activated on a<br />
number <strong>of</strong> occasions, <strong>the</strong> Governing Board interpreted <strong>the</strong> absolute<br />
trigger rules <strong>of</strong> Chapter IV <strong>of</strong> <strong>the</strong> Agreement to exclude “fluctuations<br />
<strong>of</strong> supply attributable to normal market forces, ordinary operational<br />
89
difficulties <strong>of</strong> <strong>the</strong> industry, interruptions <strong>of</strong> supply due to strikes or<br />
cases in which activation would shortly become unnecessary because<br />
<strong>of</strong> an anticipated resumption <strong>of</strong> sufficient supply to <strong>the</strong> affected<br />
country or countries” [See <strong>IEA</strong>/ED/80.198 to Heads <strong>of</strong> Delegations].<br />
But note that <strong>the</strong> Governing Board is empowered to substitute its own<br />
judgement to make <strong>the</strong> finding and <strong>the</strong>reby to activate <strong>the</strong> Emergency<br />
Sharing System [See Article 21.4].<br />
As indicated in Chapter V, Section A-1 below, <strong>the</strong> Governing Board<br />
enjoys extremely broad powers to operate and develop <strong>the</strong> Agency; <strong>the</strong><br />
broad powers conferred in Articles 51.2, 6.4 and 22 are supplemented by a<br />
number <strong>of</strong> specific powers relative to <strong>the</strong> Agreement. While interpretation is<br />
not mentioned specifically, <strong>the</strong> interpretation power is included by<br />
implication in Article 51.1 which states this:<br />
<strong>The</strong> Governing Board shall adopt decisions and make<br />
recommendations which are necessary for <strong>the</strong> proper functioning<br />
<strong>of</strong> <strong>the</strong> Program.<br />
Since decisions taken by <strong>the</strong> Governing Board are “binding” as provided in<br />
Article 52.1, presumably an interpretation decision cast in legally binding<br />
terms would also be binding and without appeal inside or outside <strong>of</strong> <strong>the</strong><br />
Agency. <strong>The</strong> Board has never had occasion to address that question or <strong>the</strong><br />
important voting question <strong>of</strong> whe<strong>the</strong>r such a measure is a “management”<br />
matter subject to “majority” or whe<strong>the</strong>r it properly falls in <strong>the</strong> category <strong>of</strong><br />
“all o<strong>the</strong>r decisions” in Article 61.1(b) requiring unanimity.<br />
When serious controversy arises over a question <strong>of</strong> interpretation, <strong>the</strong><br />
underlying policy concerns could be sufficiently important to compel<br />
consideration <strong>of</strong> <strong>the</strong> policy and operational implications <strong>of</strong> <strong>the</strong> available<br />
alternatives. <strong>The</strong> ultimate alternative is amendment <strong>of</strong> <strong>the</strong> Agreement [See<br />
Section K above]. When resort to broad powers <strong>of</strong> <strong>the</strong> Board and to<br />
interpretation fail, an amendment could become <strong>the</strong> only alternative to<br />
acquiescence. Since unanimity is required for amendments, even an<br />
amendment might not be a realistic alternative, particularly if a division <strong>of</strong><br />
views <strong>of</strong> Members had emerged. Proceeding by formal amendment has <strong>the</strong><br />
advantages <strong>of</strong>: (1) avoiding any doubt concerning <strong>the</strong> validity <strong>of</strong> a decision<br />
if made by interpretation, (2) being directly binding under <strong>the</strong> law <strong>of</strong><br />
treaties, and (3) enjoying <strong>the</strong> permanence <strong>of</strong> a formal amendment and<br />
attracting greater public notice. However, those advantages have almost<br />
always been found to be outweighed by <strong>the</strong> burdens <strong>of</strong> <strong>the</strong> formal<br />
90
amendment procedure: (1) <strong>the</strong> need to resort to a “consent to be bound”<br />
procedure with attendant delay and to rely upon provisional application, (2)<br />
<strong>the</strong> possible political problems <strong>of</strong> raising such a question in <strong>the</strong> parliaments<br />
<strong>of</strong> Members, and (3) <strong>the</strong> difficulty <strong>of</strong> effecting future adaptations.<br />
Understandably, interpretations and adaptations have been <strong>the</strong> procedures<br />
<strong>of</strong> choice in virtually all cases <strong>of</strong> difficulty, with <strong>the</strong> exception only <strong>of</strong> <strong>the</strong><br />
new Member situations in which an amendment was indispensable and<br />
found to be facilitated under <strong>the</strong> special rules <strong>of</strong> Article 62.5.<br />
N. General Review <strong>of</strong> <strong>the</strong> I.E.P.<br />
<strong>The</strong> possible need for review <strong>of</strong> <strong>the</strong> I.E.P. Agreement once <strong>the</strong> Agency<br />
gained sufficient operational experience to make <strong>the</strong> exercise worthwhile did<br />
not escape <strong>the</strong> attention <strong>of</strong> <strong>the</strong> founders. <strong>The</strong>y provided in Article 74 for a<br />
general review, as follows:<br />
This Agreement shall be subject to a general review after<br />
1st May, 1980.<br />
<strong>The</strong> effect <strong>of</strong> this provision was to keep in <strong>the</strong> air <strong>the</strong> possibility <strong>of</strong> a general<br />
review, which could be initiated with or without an Article 74 formulation.<br />
<strong>The</strong> general powers <strong>of</strong> <strong>the</strong> Governing Board could be employed at any time<br />
to launch a general review <strong>of</strong> <strong>the</strong> Agreement, but Article 74 provided a target<br />
date when <strong>the</strong> question might be considered. Article 74 did not set a rigid<br />
deadline for <strong>the</strong> review; it merely suggested at <strong>the</strong> outset a period <strong>of</strong> a little<br />
more than five years for <strong>the</strong> Agency to gain experience and <strong>the</strong>n to consider<br />
conducting a review <strong>the</strong>reafter, without specifying when <strong>the</strong> review should<br />
take place. <strong>The</strong> decisions on whe<strong>the</strong>r to conduct a review and on its possible<br />
scope and timing were all left to <strong>the</strong> discretion <strong>of</strong> <strong>the</strong> Governing Board.<br />
While <strong>the</strong>re has been a number <strong>of</strong> partial reviews <strong>of</strong> <strong>the</strong> Agreement and<br />
<strong>of</strong> Members’ energy security and policy needs, Article 74 has never been<br />
invoked formally and a systematic review <strong>of</strong> <strong>the</strong> Agreement as such has never<br />
taken place. Policy reviews are carried out each year in <strong>the</strong> Member countries,<br />
<strong>the</strong> Secretariat, <strong>the</strong> Standing Groups and <strong>the</strong> Governing Board in <strong>the</strong> process <strong>of</strong><br />
developing <strong>the</strong> Agency’s annual Programmes <strong>of</strong> Work. Specialized reviews are<br />
conducted periodically as <strong>the</strong> need arises to focus attention on particular<br />
sectors. Sometimes <strong>the</strong>se take <strong>the</strong> form <strong>of</strong> general “brainstorming” sessions to<br />
re-examine <strong>the</strong> possible future directions <strong>of</strong> <strong>the</strong> Agency. Each <strong>of</strong> <strong>the</strong> lead-up<br />
periods to <strong>the</strong> Ministerial Level meetings <strong>of</strong> <strong>the</strong> Governing Board is taken up<br />
91
with policy reviews as well in preparation for possible Ministerial action.<br />
So far in <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong>re has been only one comprehensive<br />
review approaching <strong>the</strong> kind foreseen in Article 74, and that was not, strictly<br />
speaking, a review <strong>of</strong> <strong>the</strong> Agreement itself but one largely limited to pre-crisis<br />
situations and emergency preparation. This was <strong>the</strong> 1981 review ordered by <strong>the</strong><br />
Governing Board at Ministerial Level on 8-9 December 1980, in <strong>the</strong> following terms:<br />
<strong>the</strong> Governing Board at Official Level will carry out a serious<br />
review <strong>of</strong> legal requirements in order to improve <strong>the</strong> basis for<br />
co-operation in pre-crisis situations and in emergency<br />
preparation [See <strong>IEA</strong>/GB(80)97, Item 2(m)(v)].<br />
A High Level Ad Hoc Group <strong>of</strong> <strong>the</strong> Governing Board was constituted for that<br />
purpose under <strong>the</strong> chairmanship <strong>of</strong> <strong>the</strong> Executive Director (Ulf Lantzke).<br />
<strong>The</strong> Group began its work early in 1981 and reported to <strong>the</strong> June 1981<br />
Ministerial Level meeting which noted <strong>the</strong> progress <strong>of</strong> its work, in particular<br />
<strong>the</strong> basic concept and main elements drawn from past experience, which<br />
included monitoring, information, stand-by sub-crisis measures, emergency<br />
reserve requirements, crude oil pricing and government/industry relations<br />
[See <strong>IEA</strong>/GB(81)33(2nd Rev.), Item 4; <strong>IEA</strong>/GB(81)31]. Subsequent<br />
Governing Board and Standing Group meetings reviewed <strong>the</strong> High Level Ad<br />
Hoc Group’s work throughout <strong>the</strong> year, leading on 10 December 1981 to <strong>the</strong><br />
Board’s adoption <strong>of</strong> <strong>the</strong> decision on “Preparation for Future Supply<br />
Disruptions” [<strong>IEA</strong>/GB(81)86, Item 2, Annex I]. Among <strong>the</strong> provisions <strong>of</strong><br />
that decision were <strong>the</strong> recognition <strong>of</strong> <strong>the</strong> importance <strong>of</strong> oil supply disruptions<br />
below <strong>the</strong> seven per cent level required to trigger <strong>the</strong> Emergency Sharing<br />
System, <strong>the</strong> enhanced monitoring functions, <strong>the</strong> inauguration <strong>of</strong> more<br />
comprehensive monthly oil reports from Members (Questionnaire C, now<br />
discontinued), <strong>the</strong> empowerment <strong>of</strong> <strong>the</strong> Executive Director to activate <strong>the</strong><br />
emergency information system (Questionnaires A and B), <strong>the</strong> arrangement<br />
for <strong>the</strong> Board to meet promptly at <strong>the</strong> appropriate level to decide on<br />
necessary action to meet <strong>the</strong> situation, <strong>the</strong> inventory <strong>of</strong> possible measures to<br />
supplement market forces and <strong>the</strong> arrangements for company consultations.<br />
<strong>The</strong> 1981 review was part <strong>of</strong> a process by which <strong>the</strong> Agency, beginning<br />
with <strong>the</strong> responses to <strong>the</strong> 1979-1981 oil supply disruptions, prepared itself to<br />
deal more effectively with what was known as “sub-crisis” situations, that is<br />
those not falling within <strong>the</strong> seven per cent shortfall concepts <strong>of</strong> <strong>the</strong><br />
Emergency Sharing System. That process continued after <strong>the</strong> December<br />
1981 Governing Board Decision, culminating in <strong>the</strong> 11 July 1984 “Decision<br />
on Stocks and Supply Disruptions” [<strong>IEA</strong>/GB(84)27, Item 2(a), Annex I] and<br />
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<strong>the</strong> applications in <strong>the</strong> 1990-1991 Gulf Crisis decisions [See <strong>IEA</strong>/GB(90)24,<br />
Annex; <strong>IEA</strong>/GB(90)27, Annex; <strong>IEA</strong>/GB(90)32, Annex; <strong>IEA</strong>/GB(90)39,<br />
Item 2; <strong>IEA</strong>/GB(90)46, Item 2; <strong>IEA</strong>/GB(91)1, Annex; <strong>IEA</strong>/GB(91)3, Annex;<br />
<strong>IEA</strong>/GB(91)19, Item 3; <strong>IEA</strong>/GB(91)46, paragraphs 4-8].<br />
<strong>The</strong> multi-faceted <strong>IEA</strong> review process, described briefly above, has<br />
served to keep <strong>the</strong> Agency’s work in close proximity to <strong>the</strong> evolving policy and<br />
operational concerns <strong>of</strong> <strong>the</strong> Members. It has permitted <strong>the</strong> Agency to adapt its<br />
programme and structures to <strong>the</strong> changing conditions <strong>of</strong> <strong>the</strong> energy markets<br />
and to broadening considerations <strong>of</strong> energy security. Although a systematic,<br />
Article 74 type review <strong>of</strong> <strong>the</strong> Agreement has not proven necessary or fruitful<br />
since <strong>the</strong> time <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s establishment, <strong>the</strong> o<strong>the</strong>r review procedures applied<br />
by <strong>the</strong> <strong>IEA</strong> have served adequately <strong>the</strong> review needs <strong>of</strong> <strong>the</strong> Agency.<br />
O. Depositary<br />
<strong>The</strong> function <strong>of</strong> depositary <strong>of</strong> <strong>the</strong> I.E.P. Agreement has been carried out by<br />
<strong>the</strong> Government <strong>of</strong> Belgium which holds <strong>the</strong> single, original text <strong>of</strong> <strong>the</strong><br />
Agreement. <strong>The</strong> general depositary responsibility was assigned to <strong>the</strong><br />
Government <strong>of</strong> Belgium in Article 76 <strong>of</strong> <strong>the</strong> Agreement which provides this:<br />
<strong>The</strong> original <strong>of</strong> this Agreement, <strong>of</strong> which <strong>the</strong> English, French<br />
and German texts are equally au<strong>the</strong>ntic, shall be deposited with<br />
<strong>the</strong> Government <strong>of</strong> Belgium, and a certified copy <strong>the</strong>re<strong>of</strong> shall<br />
be furnished to each o<strong>the</strong>r Participating Country by <strong>the</strong><br />
Government <strong>of</strong> Belgium.<br />
Some <strong>of</strong> <strong>the</strong> specific notification functions <strong>of</strong> <strong>the</strong> depositary are stated in<br />
Article 75:<br />
<strong>The</strong> Government <strong>of</strong> Belgium shall notify all Participating<br />
Countries <strong>of</strong> <strong>the</strong> deposit <strong>of</strong> each notification <strong>of</strong> consent to be<br />
bound in accordance with Article 67, and <strong>of</strong> each instrument <strong>of</strong><br />
accession, <strong>of</strong> <strong>the</strong> entry into force <strong>of</strong> this Agreement or any<br />
amendment <strong>the</strong>reto, <strong>of</strong> any denunciation <strong>the</strong>re<strong>of</strong>, and <strong>of</strong> any<br />
o<strong>the</strong>r declaration or notification received.<br />
Each Signatory State is obligated in Article 67.1 to “notify <strong>the</strong> Government<br />
<strong>of</strong> Belgium that, having complied with its constitutional procedures, it<br />
consents to be bound by this Agreement”. Parallel notifications are to be<br />
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given by acceding States [Article 71.2] and by States terminating<br />
<strong>the</strong> application <strong>of</strong> <strong>the</strong> Agreement to <strong>the</strong>m [Article 69.2], as well as by<br />
States making declarations on <strong>the</strong> territorial application <strong>of</strong> <strong>the</strong><br />
Agreement [Article 70], as provided in <strong>the</strong> cited Articles <strong>of</strong> <strong>the</strong><br />
Agreement.<br />
Under Article 76.2 <strong>of</strong> <strong>the</strong> Vienna Convention on <strong>the</strong> Law <strong>of</strong> Treaties,<br />
“<strong>The</strong> functions <strong>of</strong> <strong>the</strong> depositary <strong>of</strong> a treaty are international in character<br />
and <strong>the</strong> depositary is under an obligation to act impartially in <strong>the</strong>ir<br />
performance”. A fuller inventory <strong>of</strong> <strong>the</strong> depositary’s functions is set forth in<br />
Article 77.1 <strong>of</strong> that Convention, including <strong>the</strong> function <strong>of</strong> “registering <strong>the</strong><br />
treaty with <strong>the</strong> Secretariat <strong>of</strong> <strong>the</strong> United Nations” [Article 77.1(g); and see<br />
Article 80]. Registration was required under Article 102 <strong>of</strong> <strong>the</strong> United<br />
Nations Charter. <strong>The</strong> Government <strong>of</strong> Belgium duly registered <strong>the</strong> I.E.P.<br />
Agreement with <strong>the</strong> United Nations Secretariat in 1977, and <strong>the</strong> Agreement<br />
was published in <strong>the</strong> United Nations Treaty Series, <strong>Vol</strong>ume 1040, p. 271, as<br />
No. 15664 in 1985.<br />
In Brussels <strong>the</strong> Government <strong>of</strong> Belgium’s depositary functions are<br />
carried out by <strong>the</strong> Treaties Section, Ministère des Affaires Étrangères, where<br />
<strong>the</strong> original I.E.P. Agreement and related documents are held.<br />
P. <strong>The</strong> I.E.P. Agreement Languages<br />
Article 76 <strong>of</strong> <strong>the</strong> I.E.P. Agreement refers to <strong>the</strong> English, French and German<br />
texts <strong>of</strong> <strong>the</strong> original Agreement as being “equally au<strong>the</strong>ntic”. <strong>The</strong> original<br />
Agreement as well as all amendments have been established in <strong>the</strong> three<br />
languages [See Chapter VIII, Section C on Languages].<br />
Q. Withdrawal<br />
<strong>The</strong>re are two fundamental rules governing <strong>the</strong> possible withdrawal <strong>of</strong> a<br />
State party to <strong>the</strong> I.E.P. Agreement. <strong>The</strong> first is <strong>the</strong> right <strong>of</strong> a party to<br />
withdraw “in conformity with <strong>the</strong> provisions <strong>of</strong> <strong>the</strong> treaty” [Vienna<br />
Convention, Article 54(a)]. <strong>The</strong> second is <strong>the</strong> general rule <strong>of</strong> treaty law<br />
which permits a party to withdraw from a treaty “at any time by consent <strong>of</strong><br />
all <strong>the</strong> parties after consultation with <strong>the</strong> o<strong>the</strong>r contracting States” [Vienna<br />
Convention on <strong>the</strong> Law <strong>of</strong> Treaties, Article 54(b)].<br />
In <strong>the</strong> case <strong>of</strong> <strong>the</strong> I.E.P. Agreement, Article 69.2 provides for a party<br />
to withdraw as follows:<br />
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Any Participating Country may terminate <strong>the</strong> application <strong>of</strong><br />
this Agreement for its part upon twelve months’ written notice<br />
to <strong>the</strong> Government <strong>of</strong> Belgium to that effect, given not less than<br />
three years after <strong>the</strong> first day <strong>of</strong> <strong>the</strong> provisional application <strong>of</strong><br />
this Agreement.<br />
Under that provision, withdrawal was not possible before 18 November<br />
1977, three years after <strong>the</strong> signature and provisional application <strong>of</strong> <strong>the</strong><br />
Agreement. <strong>The</strong>re were no withdrawal requests or actions during that<br />
period. From 18 November 1977 to <strong>the</strong> present day, Members have been<br />
free to withdraw at any time upon twelve months’ notice, but <strong>the</strong>re have<br />
been no withdrawals to date.<br />
R. Duration<br />
As indicated above in Section G, <strong>the</strong> I.E.P. Agreement entered into force on<br />
19 January 1976, and for Members which <strong>the</strong>reafter deposited <strong>the</strong>ir consents<br />
to be bound <strong>the</strong> Agreement entered into force ten days following <strong>the</strong> dates <strong>of</strong><br />
deposit <strong>of</strong> <strong>the</strong>ir respective consents to be bound. <strong>The</strong> Agreement remains in<br />
force until it is terminated in accordance with international law.<br />
<strong>The</strong> rules governing termination <strong>of</strong> a treaty bear some conceptual<br />
similarity to <strong>the</strong> rules on <strong>the</strong> withdrawal <strong>of</strong> individual parties discussed<br />
above in <strong>the</strong> preceding Section. International treaty law permits <strong>the</strong><br />
termination <strong>of</strong> a treaty for all parties ei<strong>the</strong>r (1) at any time by consent <strong>of</strong> all<br />
<strong>the</strong> parties or (2) in conformity with <strong>the</strong> provisions <strong>of</strong> <strong>the</strong> treaty [See Vienna<br />
Convention on <strong>the</strong> Law <strong>of</strong> Treaties, Article 54]. <strong>The</strong> governing provision <strong>of</strong><br />
<strong>the</strong> I.E.P. Agreement is Article 69.1 which provides that<br />
This Agreement shall remain in force for a period <strong>of</strong> ten years<br />
from <strong>the</strong> date <strong>of</strong> its entry into force and shall continue in force<br />
<strong>the</strong>reafter unless and until <strong>the</strong> Governing Board, acting by<br />
majority, decides on its termination.<br />
Under <strong>the</strong> international legal rules referred to above, <strong>the</strong> parties could<br />
terminate <strong>the</strong> Agreement at any time, including <strong>the</strong> ten year period referred<br />
to in Article 69.1 quoted above, with <strong>the</strong> consent <strong>of</strong> all <strong>the</strong> parties (that is,<br />
in effect by unanimity), or <strong>the</strong>y could conclude a later treaty with provision<br />
to that effect [Vienna Convention, Article 59]. Now that <strong>the</strong> initial ten year<br />
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period has passed, <strong>the</strong> I.E.P. Article 69.1 “majority” vote rule would apply<br />
in place <strong>of</strong> unanimity. Hence <strong>the</strong> present situation is that <strong>the</strong> Agreement<br />
may be terminated by <strong>the</strong> Governing Board acting by consensus in keeping<br />
with <strong>the</strong> Board’s decision-making practice; or if that is not possible, by <strong>the</strong><br />
affirmative vote <strong>of</strong> an <strong>IEA</strong> “majority” consisting <strong>of</strong> half <strong>of</strong> <strong>the</strong> Members<br />
voting and 60 per cent <strong>of</strong> <strong>the</strong> combined voting weights [Article 62.3].<br />
Throughout <strong>the</strong> history <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, <strong>the</strong>re has been no discussion <strong>of</strong> an issue<br />
<strong>of</strong> this kind in any <strong>of</strong> <strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency. In practical terms, <strong>the</strong><br />
Agreement will continue to remain in force indefinitely until termination<br />
action is taken under Article 69.1, quoted above.<br />
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CHAPTER IV<br />
<strong>IEA</strong> Relationships<br />
Following <strong>the</strong> foregoing consideration <strong>of</strong> <strong>the</strong> formation <strong>of</strong> <strong>the</strong> Agency and<br />
<strong>the</strong> particular features <strong>of</strong> <strong>the</strong> I.E.P. Agreement, attention must be given<br />
to <strong>the</strong> key relationships which <strong>the</strong> creation <strong>of</strong> <strong>the</strong> Agency brought into<br />
being. This Chapter examines those relationships, beginning with<br />
membership in <strong>the</strong> <strong>IEA</strong>, in recounting <strong>the</strong> history <strong>of</strong> that most fundamental<br />
<strong>of</strong> <strong>IEA</strong> relationships. <strong>The</strong> next subject is <strong>the</strong> obligations <strong>of</strong> Members, which<br />
follows logically as <strong>the</strong> most immediate consequence <strong>of</strong> membership, viewed<br />
from <strong>the</strong> standpoint <strong>of</strong> <strong>the</strong> Members <strong>the</strong>mselves. <strong>The</strong>n <strong>the</strong> focus shifts from<br />
Members’ relationships to those <strong>of</strong> <strong>the</strong> Agency itself, first <strong>the</strong> Agency’s<br />
important relationship <strong>of</strong> “autonomy” with <strong>the</strong> OECD, and <strong>the</strong>n <strong>the</strong><br />
external relations competence <strong>of</strong> <strong>the</strong> Agency generally.<br />
A. Membership in <strong>the</strong> <strong>IEA</strong><br />
Membership in <strong>the</strong> <strong>IEA</strong> has been established through two quite separate<br />
procedures: (1) by signature <strong>of</strong> <strong>the</strong> I.E.P. Agreement and <strong>the</strong> procedures<br />
applicable to Signatories, or (2) by accession to <strong>the</strong> Agreement and <strong>the</strong><br />
procedures appropriate to accession [See Chapter III, Section H above]. In<br />
ei<strong>the</strong>r case, <strong>IEA</strong> Members were initial parties to <strong>the</strong> OECD Council Decision<br />
on Establishment <strong>of</strong> <strong>the</strong> Agency described above in Chapter II, Section C-5, or<br />
<strong>the</strong>y were required to accede to that Decision as a condition <strong>of</strong> membership.<br />
At <strong>the</strong> time <strong>of</strong> signature, all <strong>of</strong> <strong>the</strong> Agreement Signatories were also parties to<br />
<strong>the</strong> Council Decision adopted three days before <strong>the</strong> Agreement was signed.<br />
That Decision identified by name <strong>the</strong> founding Members <strong>of</strong> <strong>the</strong> Agency, called<br />
“Participating Countries <strong>of</strong> <strong>the</strong> Agency” in Article 2(a), and made provision<br />
for membership to be enlarged both by <strong>the</strong> addition <strong>of</strong> those OECD Members<br />
“which accede to this Decision and to <strong>the</strong> Agreement in accordance with its<br />
terms” and by <strong>the</strong> addition <strong>of</strong> <strong>the</strong> European Communities (European Union)<br />
upon <strong>the</strong>ir accession to <strong>the</strong> two instruments [See Articles 2 and 3].<br />
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1. Signatories<br />
<strong>The</strong> sixteen signatories were Austria, Belgium, Canada, Denmark, Germany,<br />
Ireland, Italy, Japan, Luxembourg, <strong>The</strong> Ne<strong>the</strong>rlands, Spain, Sweden,<br />
Switzerland, Turkey, <strong>the</strong> United Kingdom and <strong>the</strong> United States. <strong>The</strong>se<br />
countries had participated in <strong>the</strong> Washington Energy Conference in February<br />
<strong>1974</strong>, or in <strong>the</strong> Brussels Energy Co-ordinating Group, or in both during <strong>the</strong><br />
preparation <strong>of</strong> <strong>the</strong> I.E.P. Agreement and <strong>the</strong> Council Decision texts. Each <strong>of</strong><br />
<strong>the</strong>m had also participated in <strong>the</strong> Council Decision on 15 November <strong>1974</strong><br />
before signing <strong>the</strong> Agreement on 18 November. <strong>The</strong>y constituted <strong>the</strong> entire<br />
group <strong>of</strong> Signatories, for <strong>the</strong>re was no provision for subsequent signatures,<br />
and <strong>the</strong> only provision for later membership was by means <strong>of</strong> accession. All<br />
<strong>of</strong> <strong>the</strong> Signatories were bound immediately to apply <strong>the</strong> Agreement<br />
provisionally before <strong>the</strong> Agreement would enter into force [See Chapter III,<br />
Section D above] and <strong>the</strong>y were subject to <strong>the</strong> consent to be bound<br />
procedures provided in <strong>the</strong> Agreement [See Chapter III, Section E above].<br />
All Signatories have since become definitive parties to <strong>the</strong> I.E.P.<br />
Agreement. <strong>The</strong>y were required not only to be parties to <strong>the</strong> Council<br />
Decision (and <strong>the</strong>y all were at <strong>the</strong> outset), but also to sign <strong>the</strong> I.E.P.<br />
Agreement, and to become definitively bound by <strong>the</strong> Agreement ei<strong>the</strong>r by<br />
means <strong>of</strong> <strong>the</strong> deposit <strong>of</strong> <strong>the</strong>ir respective consents to be bound or by means <strong>of</strong><br />
an alternative procedure provided in Article 13 <strong>of</strong> <strong>the</strong> Council Decision for<br />
<strong>the</strong> Program to become binding upon <strong>the</strong>m by an internal <strong>IEA</strong> procedure.<br />
Thus Article 13(b) <strong>of</strong> <strong>the</strong> Council Decision provides that:<br />
. . . a Country whose Government shall have signed <strong>the</strong><br />
Agreement may, upon written notice to <strong>the</strong> Governing Board<br />
and to <strong>the</strong> Government <strong>of</strong> Belgium to <strong>the</strong> effect that <strong>the</strong><br />
adoption <strong>of</strong> <strong>the</strong> Program by <strong>the</strong> Governing Board is binding on<br />
it pursuant to this Decision, remain a Participating Country <strong>of</strong><br />
<strong>the</strong> Agency after <strong>the</strong> Agreement shall have ceased to apply for<br />
it, unless <strong>the</strong> Governing Board decides o<strong>the</strong>rwise. Such a<br />
Country shall have <strong>the</strong> same obligations and <strong>the</strong> same rights as<br />
a Participating Country <strong>of</strong> <strong>the</strong> Agency for which <strong>the</strong> Agreement<br />
shall have entered definitively into force.<br />
In such a case a Participating Country need not be a party to <strong>the</strong> Agreement<br />
as such, but may remain in <strong>the</strong> Agency if identical legal obligations are<br />
undertaken in <strong>the</strong> prescribed manner. This latter procedure was made<br />
possible by <strong>the</strong> Governing Board when adopting <strong>the</strong> full text <strong>of</strong> <strong>the</strong><br />
Agreement as a decision <strong>of</strong> <strong>the</strong> Governing Board [See Chapter II, Section C-7<br />
98
above]. Under <strong>the</strong> authority <strong>of</strong> <strong>the</strong> Governing Board as recognized by <strong>the</strong><br />
OECD Council, and <strong>the</strong> Board’s powers as provided in <strong>the</strong> Agreement, <strong>the</strong><br />
Board is empowered to make such decisions which are legally binding upon<br />
<strong>the</strong> Participating Countries. <strong>The</strong> procedure <strong>of</strong> Article 13(b) was employed<br />
by Japan for its definitive commitments under <strong>the</strong> International Energy<br />
Program; <strong>the</strong> o<strong>the</strong>r Members have expressed <strong>the</strong>ir commitments by separate<br />
consents to be bound to <strong>the</strong> I.E.P. Agreement itself. Thus in one way or <strong>the</strong><br />
o<strong>the</strong>r all Signatories have accepted <strong>the</strong> obligations <strong>of</strong> <strong>the</strong> Agreement as a<br />
condition <strong>of</strong> membership in <strong>the</strong> Agency.<br />
2. Membership by Accession<br />
Provision was also made for qualified countries which were not Signatories<br />
to <strong>the</strong> I.E.P. Agreement to become Members <strong>of</strong> <strong>the</strong> <strong>IEA</strong> by accession to <strong>the</strong><br />
Agreement. For prospective Members I.E.P. Agreement Article 71.1<br />
provides that<br />
This Agreement shall be open for accession by any Member <strong>of</strong><br />
<strong>the</strong> Organisation for Economic Co-operation and Development<br />
which is able and willing to meet <strong>the</strong> requirements <strong>of</strong> <strong>the</strong><br />
Program. <strong>The</strong> Governing Board, acting by majority, shall<br />
decide on any request for accession [Emphasis added].<br />
<strong>The</strong> condition that prospective Members be “able and willing to meet <strong>the</strong><br />
requirements <strong>of</strong> <strong>the</strong> Program” has required in most cases a lengthy process<br />
<strong>of</strong> consultation and negotiation before a prospective Member’s request for<br />
admission could be acted upon by <strong>the</strong> Governing Board. An elaborate<br />
procedure has been followed to ensure that <strong>the</strong> necessary elements are<br />
brought to <strong>the</strong> Board before it acts. To date, <strong>the</strong>re have been six<br />
membership exercises in <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency, each following essentially<br />
<strong>the</strong> same procedural pattern, beginning with New Zealand (1976) and<br />
continuing with Greece (1977), Australia (1979), Portugal (1981), Finland<br />
(1992) and France (1992). New Zealand had participated in <strong>the</strong> Brussels<br />
ECG and was ready quite rapidly, about one month after <strong>the</strong> membership<br />
discussions were authorized by <strong>the</strong> Governing Board. In most o<strong>the</strong>r cases<br />
<strong>the</strong> process took many months; it lasted over a year for Portugal and France.<br />
In all cases <strong>of</strong> new membership in <strong>the</strong> Agency, <strong>the</strong> Agency is required<br />
to marshall <strong>the</strong> facts and judgements about <strong>the</strong> ability <strong>of</strong> <strong>the</strong> prospective<br />
Member to carry out <strong>the</strong> Agency commitments, and <strong>the</strong> authorities <strong>of</strong> <strong>the</strong><br />
country concerned must familiarize <strong>the</strong>mselves with those commitments<br />
99
and <strong>the</strong> Agency’s practices and expectations. Both sides require time to<br />
work through <strong>the</strong> procedures and to resolve any problems posed by <strong>the</strong><br />
prospective Member. This process is complicated by <strong>the</strong> fact that <strong>the</strong> new<br />
Member has an increasingly vast amount <strong>of</strong> Agency material to consider,<br />
accept and accommodate to, including all <strong>the</strong> Governing Board decisions<br />
since <strong>1974</strong>, which range over broad fields <strong>of</strong> action. Additional time may be<br />
required when <strong>the</strong> views <strong>of</strong> a number <strong>of</strong> <strong>the</strong> new Member’s government<br />
departments have to be developed and co-ordinated, or if legislation or<br />
parliamentary action on <strong>the</strong> consent to be bound is to be obtained.<br />
Over <strong>the</strong> years, however, a procedural pattern has developed to<br />
simplify and expedite this process for countries which are already Members<br />
<strong>of</strong> <strong>the</strong> OECD. If <strong>IEA</strong> membership should be sought by non-Members <strong>of</strong> <strong>the</strong><br />
OECD (which has not yet occurred), <strong>the</strong> <strong>IEA</strong> procedures could <strong>the</strong>oretically<br />
be carried out ei<strong>the</strong>r after or in parallel with <strong>the</strong> procedures for OECD<br />
membership, since membership in OECD is a prerequisite to <strong>IEA</strong><br />
membership. As developed to date, however, for countries which are<br />
already Members <strong>of</strong> <strong>the</strong> OECD <strong>the</strong> procedural pattern may be described in<br />
abbreviated form as follows:<br />
(a) Initial Contacts. After possible informal soundings and o<strong>the</strong>r<br />
contacts, <strong>the</strong> competent authorities <strong>of</strong> <strong>the</strong> new Member make <strong>the</strong>ir first<br />
<strong>of</strong>ficial expression <strong>of</strong> interest, usually by its Permanent Delegate to <strong>the</strong><br />
OECD, to <strong>the</strong> <strong>IEA</strong> Executive Director or Deputy. This is normally followed<br />
by an informal meeting between <strong>the</strong> country’s representatives and <strong>the</strong><br />
Executive Director and key <strong>IEA</strong> Staff Members for preliminary discussions<br />
in which <strong>the</strong> Executive Director outlines <strong>the</strong> procedures to be followed and<br />
in which <strong>the</strong> next steps and a time table are agreed upon.<br />
(b) Documentation. <strong>The</strong> Secretariat provides relevant Governing<br />
Board documentation (Conclusions and o<strong>the</strong>r documents, as appropriate),<br />
as well as selected Standing Group, Committee and o<strong>the</strong>r documents that<br />
are needed.<br />
(c) <strong>IEA</strong> Member Commitment Paper. When <strong>the</strong> need arises, <strong>the</strong><br />
<strong>IEA</strong> Legal Counsel prepares a paper outlining <strong>the</strong> principal commitments <strong>of</strong><br />
<strong>IEA</strong> Members, in order to inform <strong>the</strong> new Member’s authorities as fully as<br />
possible about <strong>the</strong> legal consequences <strong>of</strong> membership.<br />
(d) Official Letter from <strong>the</strong> New Member. An <strong>of</strong>ficial letter<br />
addressed to <strong>the</strong> Executive Director states formally <strong>the</strong> new Member’s<br />
100
interest in joining <strong>the</strong> Agency and proposes that discussions be entered into<br />
for that purpose.<br />
(e) Governing Board Action on <strong>the</strong> Initial Letter. <strong>The</strong> Secretariat<br />
transmits <strong>the</strong> letter to <strong>the</strong> Governing Board which is asked to authorize <strong>the</strong><br />
Executive Director to negotiate <strong>the</strong> specific terms <strong>of</strong> membership with <strong>the</strong><br />
new Member. <strong>The</strong> Governing Board <strong>the</strong>n discusses this question in an<br />
informal session.<br />
(f) Information and Negotiation. This is essentially an information<br />
exchange exercise, with <strong>the</strong> Agency providing additional documentation if<br />
required, and <strong>the</strong> new Member providing <strong>the</strong> Secretariat with <strong>the</strong><br />
information it needs to carry out <strong>the</strong> membership process. This stage also<br />
<strong>of</strong>fers an opportunity for negotiations on any problems <strong>the</strong> new Member<br />
might encounter under <strong>the</strong> commitments <strong>of</strong> membership, particularly in<br />
accepting <strong>the</strong> binding effect <strong>of</strong> all Governing Board decisions. <strong>The</strong> Agency<br />
must ga<strong>the</strong>r information on <strong>the</strong> ability <strong>of</strong> <strong>the</strong> new Member to carry out <strong>the</strong>se<br />
commitments. In particular it must ascertain that <strong>the</strong> new Member has<br />
sufficient legal and material ability to carry out <strong>the</strong> <strong>IEA</strong> oil Emergency<br />
Sharing System, and it must evaluate <strong>the</strong> new Member’s energy data<br />
ga<strong>the</strong>ring and reporting capabilities, as well as <strong>the</strong> willingness <strong>of</strong> <strong>the</strong> oil<br />
companies operating in <strong>the</strong> new Member’s territory to co-operate with <strong>the</strong><br />
Member and with <strong>the</strong> <strong>IEA</strong> on oil emergency matters. New Members have<br />
always accepted all obligations under <strong>the</strong> I.E.P. Agreement without any<br />
formal reservation and all Governing Board decisions without exception,<br />
o<strong>the</strong>r than to note such points as <strong>the</strong> need for slight variations when<br />
additional time might be necessary or adjustments needed to accommodate<br />
a federal structure. In <strong>the</strong> case <strong>of</strong> Norway, since major derogations could<br />
not be fitted into <strong>the</strong> full membership system, arrangements were made at<br />
its request, for it to participate under <strong>the</strong> terms <strong>of</strong> a separate agreement [See<br />
Section A-3 below]. When <strong>the</strong> Agreement with Norway was approved by<br />
<strong>the</strong> Governing Board, <strong>the</strong> Board endorsed <strong>the</strong> Chairman’s statement that it<br />
. . . results from a very special political and economic situation;<br />
it is <strong>the</strong>refore eminently “sui generis”;<br />
Because <strong>of</strong> this singularity <strong>the</strong> Agreement cannot in any fashion<br />
be invoked as a precedent [<strong>IEA</strong>/GB(75)8, Item 4(b)].<br />
Thus in <strong>IEA</strong> membership negotiations <strong>the</strong> new Members are expected to<br />
accept all obligations under <strong>the</strong> I.E.P. Agreement and <strong>the</strong> Governing Board<br />
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decisions. <strong>The</strong> arrangement with Norway, made on account <strong>of</strong> particular<br />
historical circumstances, cannot justify derogation from this principle.<br />
(g) New Member’s Formal Request for Membership. When <strong>the</strong> new<br />
Member’s authorities and <strong>the</strong> Executive Director have reached a basic understanding<br />
on <strong>the</strong> terms <strong>of</strong> membership , <strong>the</strong> new Member’s authorities write to<br />
<strong>the</strong> Executive Director to request formal accession to <strong>the</strong> I.E.P. Agreement.<br />
(h) Report to <strong>the</strong> Governing Board. If <strong>the</strong> Executive Director is<br />
satisfied that <strong>the</strong> new Member meets <strong>the</strong> requirements <strong>of</strong> membership<br />
[I.E.P. Agreement Article 71.1], <strong>the</strong> Executive Director reports in writing to<br />
<strong>the</strong> Governing Board on <strong>the</strong> negotiations generally and proposes that <strong>the</strong><br />
Board extend to <strong>the</strong> prospective new Member a formal invitation to accede<br />
to <strong>the</strong> I.E.P. Agreement. In addition to providing a basic judgement on <strong>the</strong><br />
new Member’s ability to meet <strong>IEA</strong> commitments, <strong>the</strong> report sets forth<br />
detailed data on <strong>the</strong> new Member’s oil consumption (which are necessary for<br />
calculating <strong>the</strong> new Member’s voting weights) and provides detailed<br />
information on whe<strong>the</strong>r <strong>the</strong> new Member’s oil stock levels are sufficient to<br />
meet <strong>IEA</strong> requirements. <strong>The</strong> report is accompanied by a note to <strong>the</strong> Heads<br />
<strong>of</strong> <strong>IEA</strong> Delegations showing <strong>the</strong> recalculation <strong>of</strong> all Members’ voting weights<br />
which would result from <strong>the</strong> change in membership.<br />
(i) Governing Board Invitation. On <strong>the</strong> basis <strong>of</strong> <strong>the</strong> Executive<br />
Director’s report, <strong>the</strong> Governing Board adopts <strong>the</strong> invitation decision (<strong>the</strong><br />
voting rule is majority). In that action, <strong>the</strong> Board<br />
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notes <strong>the</strong> Report containing <strong>the</strong> factual information and <strong>the</strong> Executive<br />
Director’s proposals.<br />
extends <strong>the</strong> invitation to accede to <strong>the</strong> I.E.P. Agreement and sets a time<br />
limit for <strong>the</strong> deposit <strong>of</strong> <strong>the</strong> consent to be bound (<strong>the</strong> instrument <strong>of</strong><br />
accession) if <strong>the</strong>re is to be provisional application or if <strong>the</strong>re is ano<strong>the</strong>r<br />
need for setting a time limit.<br />
deems <strong>the</strong> Member’s accession to <strong>the</strong> I.E.P. Agreement to constitute<br />
<strong>the</strong> Member’s accession also to <strong>the</strong> decisions <strong>of</strong> <strong>the</strong> Governing Board<br />
which shall <strong>the</strong>n be in force.<br />
amends <strong>the</strong> I.E.P. voting rules (adding <strong>the</strong> name <strong>of</strong> <strong>the</strong> new country, its<br />
voting weights, and any o<strong>the</strong>r necessary voting rule changes in <strong>the</strong> I.E.P.<br />
Agreement and in <strong>the</strong> decision dealing with voting when Norway<br />
participates). <strong>The</strong> I.E.P. Agreement amendments appear in <strong>the</strong><br />
invitation decision and are adopted by unanimity in <strong>the</strong> three languages.<br />
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decides any o<strong>the</strong>r questions as required in connection with <strong>the</strong><br />
membership invitation.<br />
(j) Participation in Governing Board Meetings. This is arranged<br />
to take place immediately after <strong>the</strong> invitation decision is made (near <strong>the</strong> top<br />
<strong>of</strong> <strong>the</strong> Agenda). <strong>The</strong> new Member’s representatives are admitted to <strong>the</strong><br />
Governing Board meeting room and participate <strong>the</strong>reafter in <strong>the</strong> normal<br />
way as observers, even before <strong>the</strong> remaining formalities are completed. (In<br />
<strong>the</strong> case <strong>of</strong> Finland and France this participation privilege was extended not<br />
only to <strong>the</strong> Governing Board, but also to certain o<strong>the</strong>r bodies <strong>of</strong> <strong>the</strong> Agency<br />
because <strong>of</strong> <strong>the</strong> participation <strong>of</strong> those countries and Iceland in <strong>the</strong> Agency’s<br />
Gulf Crisis proceedings and follow-up. Since <strong>the</strong> rationale for participation<br />
at that stage is preparation for accepting <strong>the</strong> current as well as <strong>the</strong><br />
previously established Governing Board decisions, in earlier cases such<br />
observer participation had been limited to <strong>the</strong> Governing Board).<br />
(k) Provisional Accession. A provisional consent to be bound may<br />
be deposited by <strong>the</strong> new Member immediately or when convenient [I.E.P.<br />
Agreement Articles 71.3, 68.2]. This foresees <strong>the</strong> new Member’s immediate,<br />
full participation in <strong>IEA</strong> activities “to <strong>the</strong> extent possible not inconsistent”<br />
[See Article 68.1] with <strong>the</strong> legislation <strong>of</strong> <strong>the</strong> new Member. This step is<br />
encouraged particularly when legislative or o<strong>the</strong>r national procedures for<br />
<strong>the</strong> definitive instrument <strong>of</strong> accession would be lengthy. <strong>The</strong> instrument <strong>of</strong><br />
provisional accession is deposited with <strong>the</strong> Government <strong>of</strong> Belgium as<br />
depositary <strong>of</strong> <strong>the</strong> Agreement.<br />
(l) Deposit <strong>of</strong> <strong>the</strong> Instrument <strong>of</strong> Accession. This is <strong>the</strong> definitive<br />
consent to be bound (similar to ratification, in effect), also deposited with <strong>the</strong><br />
Government <strong>of</strong> Belgium after national legislative and o<strong>the</strong>r procedures are<br />
completed. <strong>The</strong> Agreement formally enters into force for <strong>the</strong> new Member<br />
ten days after <strong>the</strong> instrument <strong>of</strong> accession is deposited. <strong>The</strong> depositary gives<br />
notice <strong>of</strong> <strong>the</strong> deposit to all Members and to <strong>the</strong> Executive Director.<br />
(m) Governing Board Action on Accession. This is a simple<br />
formality which takes place at <strong>the</strong> first Governing Board meeting following<br />
<strong>the</strong> deposit <strong>of</strong> <strong>the</strong> Instrument <strong>of</strong> Accession. <strong>The</strong> Board notes <strong>the</strong> date <strong>of</strong><br />
entry into force <strong>of</strong> <strong>the</strong> Agreement for <strong>the</strong> new Member and fixes internally<br />
for <strong>the</strong> Agency <strong>the</strong> <strong>of</strong>ficial date <strong>of</strong> membership for <strong>the</strong> purpose <strong>of</strong><br />
determining <strong>the</strong> new Member’s contribution to <strong>the</strong> <strong>IEA</strong> for <strong>the</strong> current<br />
financial year, and for o<strong>the</strong>r purposes.<br />
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(n) Scale <strong>of</strong> Contributions Amendment. When <strong>the</strong> accession is<br />
noted, <strong>the</strong> Governing Board adopts a new scale <strong>of</strong> contributions: it adds <strong>the</strong><br />
new Member’s contribution percentage, adjusts <strong>the</strong> scale (if necessary) for<br />
Members to apply during <strong>the</strong> remainder <strong>of</strong> <strong>the</strong> current financial year and<br />
makes <strong>the</strong> necessary arrangements for any resulting increase in Agency<br />
resources. (<strong>The</strong> cases <strong>of</strong> Finland and France were unusual in that <strong>the</strong> 1992<br />
scale <strong>of</strong> contributions was initially adopted not early in <strong>the</strong> year at <strong>the</strong><br />
normal time, but only in October 1992 after Finland and France had<br />
become Members, so revision <strong>of</strong> <strong>the</strong> scale was not necessary) [See<br />
<strong>IEA</strong>/GB(92)34 for background and <strong>the</strong> decision in <strong>IEA</strong>/GB(92)45, Item 7].<br />
(o) Accession to <strong>the</strong> OECD Council Decision. All <strong>IEA</strong> Members<br />
must be parties to <strong>the</strong> OECD Council Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong><br />
Agency as well as to <strong>the</strong> I.E.P. Agreement. (Since Australia, New Zealand<br />
and Portugal had participated in <strong>the</strong> Council Decision at <strong>the</strong> time <strong>of</strong> its<br />
adoption in <strong>1974</strong> (albeit as passive parties), it was not necessary for <strong>the</strong>m to<br />
accede to it as a condition <strong>of</strong> membership. However, since Finland, France<br />
and Greece had abstained from that Decision, and thus were not formal<br />
parties to it, each <strong>of</strong> those countries needed to accede to it in order to<br />
complete <strong>the</strong> membership formalities; <strong>the</strong>y each did so by a written<br />
communication addressed to <strong>the</strong> OECD Secretary-General).<br />
<strong>The</strong> membership procedures indicated above have <strong>the</strong> advantage <strong>of</strong><br />
enabling new Members to become thoroughly familiar with <strong>the</strong> Agency’s<br />
structure and practices and with <strong>the</strong> commitments <strong>of</strong> Members before <strong>the</strong>ir<br />
membership becomes effective. <strong>The</strong> systematic and rigorous nature <strong>of</strong> <strong>the</strong><br />
procedure also ensures that <strong>the</strong> new Members’ energy situation becomes<br />
well known to <strong>the</strong> Secretariat and that problems which might make<br />
membership difficult or impossible can be resolved. In each case <strong>the</strong> new<br />
Member was able to integrate itself rapidly into <strong>the</strong> Agency’s work. Today<br />
most Agency <strong>of</strong>ficials and Delegation members can scarcely distinguish <strong>the</strong><br />
original Signatories from <strong>the</strong> Members which came later through <strong>the</strong><br />
accession procedure.<br />
3. Exceptional Situation <strong>of</strong> Norway<br />
While <strong>IEA</strong> Members fully participate in <strong>the</strong> Agency’s work and are bound<br />
by all I.E.P. Agreement obligations as well as those adopted in Governing<br />
Board decisions, <strong>the</strong> Agency’s formal relationship with Norway must be<br />
distinguished as a singular one. Though technically Norway is not a<br />
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Member (i.e. not a full “Participating Country” in <strong>the</strong> sense <strong>of</strong> I.E.P.<br />
terminology), with only a few exceptions it participates like a Member in<br />
<strong>the</strong> work <strong>of</strong> <strong>the</strong> Agency.<br />
Norway was associated from <strong>the</strong> outset with <strong>the</strong> diplomatic process<br />
that led to <strong>the</strong> establishment <strong>of</strong> <strong>the</strong> Agency, beginning with its<br />
representation at <strong>the</strong> Washington Energy Conference in February <strong>1974</strong> and<br />
continuing in <strong>the</strong> Brussels ECG negotiation <strong>of</strong> <strong>the</strong> legal instruments which<br />
established <strong>the</strong> Agency. Never<strong>the</strong>less, it soon became apparent that despite<br />
<strong>the</strong> broad scope <strong>of</strong> Norwegian interests which corresponded to those <strong>of</strong> <strong>the</strong><br />
o<strong>the</strong>r industrial, market economy countries in <strong>the</strong> OECD, <strong>the</strong> political<br />
conjuncture in late <strong>1974</strong> made it impossible for it to join <strong>the</strong> Agency as a<br />
full Member. Norway could participate in <strong>the</strong> Agency’s energy work<br />
generally so long as appropriate provision was made to reflect <strong>the</strong> particular<br />
situation <strong>of</strong> that country, especially its indigenous oil resources. Especially<br />
difficult were <strong>the</strong> issues <strong>of</strong> Norway’s participation in <strong>the</strong> Emergency Sharing<br />
System and <strong>of</strong> its taking new commitments under <strong>IEA</strong> auspices. <strong>The</strong><br />
resulting differences in <strong>the</strong> commitments <strong>of</strong> Norway and <strong>IEA</strong> Members were<br />
so far-reaching that an exception for Norway could not be written into <strong>the</strong><br />
Agreement or be permitted by way <strong>of</strong> reservation to it. Norway thus could<br />
not be a full Member <strong>of</strong> <strong>the</strong> Agency. Yet a way might be found to<br />
accommodate Norway’s concerns in a separate arrangement which would<br />
provide for its fullest possible participation in most aspects <strong>of</strong> <strong>the</strong> Program.<br />
In <strong>the</strong> end that was done by means <strong>of</strong> a comprehensive separate Agreement<br />
signed on behalf <strong>of</strong> Norway and <strong>the</strong> Agency shortly after <strong>the</strong> Agency was<br />
established.<br />
On <strong>the</strong> one hand Norway regarded an emergency oil sharing system<br />
among important oil consumer countries as a necessary and useful step to<br />
meet possible supply crises in <strong>the</strong> future. It also considered that long-term<br />
international co-operation in <strong>the</strong> field <strong>of</strong> energy policy would be useful and<br />
that it represented a positive way to resolve <strong>the</strong> problems which nations were<br />
facing individually and collectively in this field. <strong>The</strong>re was a wide measure <strong>of</strong><br />
agreement between Norway and those countries which decided to become<br />
Members <strong>of</strong> <strong>the</strong> new International Energy Agency. On <strong>the</strong> o<strong>the</strong>r hand,<br />
Norway found itself in a special situation compared to <strong>the</strong> o<strong>the</strong>r industrial<br />
market economy countries grouped toge<strong>the</strong>r in <strong>the</strong> Agency. Full membership<br />
in <strong>the</strong> Agency might not, <strong>the</strong>refore, be best for Norway, although a special<br />
arrangement for its practical participation in <strong>the</strong> Agency would be useful,<br />
and Norway was prepared to enter into a binding agreement to that effect<br />
and to undertake <strong>the</strong> necessary obligations. In an oil supply crisis, Norway<br />
would agree, on <strong>the</strong> basis <strong>of</strong> its own decision, to take appropriate oil demand<br />
105
estraint measures and to activate any standby oil production capacity <strong>the</strong>re<br />
might be on <strong>the</strong> Norwegian continental shelf. It would also be prepared to<br />
take part in <strong>the</strong> long-term co-operation which was envisaged in <strong>the</strong> I.E.P.<br />
Agreement and which it believed might be <strong>of</strong> great international significance.<br />
Being both an oil producing country and a country whose economy was<br />
strongly integrated with that <strong>of</strong> <strong>the</strong> OECD countries, Norway hoped also to<br />
play a constructive role in preparing a dialogue with <strong>the</strong> principal producing<br />
countries [<strong>IEA</strong>/GB(74)9(1st Revision), Item 7].<br />
<strong>The</strong> Governing Board discussed <strong>the</strong> question <strong>of</strong> <strong>IEA</strong> relations with<br />
Norway at its first meeting and “noted <strong>the</strong> wishes <strong>of</strong> <strong>the</strong> Norwegian<br />
authorities for a binding agreement to be entered into between Norway and<br />
<strong>the</strong> Agency concerning <strong>the</strong> participation <strong>of</strong> Norway in <strong>the</strong> work <strong>of</strong> <strong>the</strong><br />
Agency”. <strong>The</strong> Board <strong>the</strong>n agreed that <strong>the</strong> Chairman would explore this<br />
question with Norwegian representatives in order to develop concrete<br />
proposals [<strong>IEA</strong>/GB(74)9(1st Revision), Item 7].<br />
Negotiations between <strong>the</strong> Norwegian representatives and <strong>the</strong><br />
Governing Board Chairman and o<strong>the</strong>rs on behalf <strong>of</strong> <strong>the</strong> Agency began<br />
immediately after that meeting and continued until <strong>the</strong> next Board meeting<br />
one month later. By that time <strong>the</strong> form <strong>of</strong> <strong>the</strong> Norway Participation<br />
Agreement was sufficiently advanced for draft elements to be submitted to<br />
<strong>the</strong> Board for preliminary review. <strong>The</strong>se draft elements, which would be<br />
adopted in <strong>the</strong> final text, included provision for possible Norwegian<br />
participation in emergency oil sharing, for consultations case by case on<br />
such participation, for Norwegian adherence to Chapters V to VIII <strong>of</strong> <strong>the</strong><br />
I.E.P. Agreement and for provisional application pending <strong>the</strong> completion <strong>of</strong><br />
formalities. <strong>The</strong> Governing Board <strong>the</strong>reupon noted that <strong>the</strong>re should be an<br />
Agreement between Norway and <strong>the</strong> Agency along <strong>the</strong> lines <strong>of</strong> <strong>the</strong> draft,<br />
asked <strong>the</strong> Secretariat to draft appropriate institutional provisions and called<br />
for early responses from Members [<strong>IEA</strong>/GB(74)11(1st Revision), Item 2].<br />
Fur<strong>the</strong>r negotiations rapidly produced what came to be <strong>the</strong> definitive<br />
version <strong>of</strong> <strong>the</strong> Norway Participation Agreement [<strong>IEA</strong>/GB(75)9]. <strong>The</strong> draft<br />
Agreement came before <strong>the</strong> next meeting <strong>of</strong> <strong>the</strong> Governing Board on<br />
7 February 1975 when <strong>the</strong> Board authorized <strong>the</strong> signature <strong>of</strong> <strong>the</strong> Agreement<br />
on behalf <strong>of</strong> <strong>the</strong> Agency and endorsed <strong>the</strong> Chairman’s statement on <strong>the</strong> “sui<br />
generis” character <strong>of</strong> that Agreement which was specifically denied <strong>the</strong><br />
status <strong>of</strong> a precedent [<strong>IEA</strong>/GB(75)8, Item 4].<br />
<strong>The</strong> Norway Participation Agreement was signed on behalf <strong>of</strong> both<br />
parties on <strong>the</strong> same day. It was quite clear that Norway intended to<br />
participate actively in <strong>the</strong> various activities <strong>of</strong> <strong>the</strong> Agency including<br />
emergency measures. From <strong>the</strong> Washington Conference onwards, Norway<br />
106
valued <strong>the</strong> emergency program as a way to avoid individual national action<br />
based on narrow self-interest that might harm partner countries. It has<br />
continued to attach great importance to <strong>the</strong> cohesion <strong>of</strong> <strong>the</strong> <strong>IEA</strong> group in<br />
case <strong>of</strong> emergency and has endeavored within its means to contribute to<br />
such policy cohesion [See <strong>IEA</strong>/GB(75)8 (Corr 1), Annex II].<br />
<strong>The</strong> key oil sharing provision <strong>of</strong> <strong>the</strong> Norway Participation Agreement<br />
is contained in Article 1 which states this:<br />
<strong>The</strong> Government shall, in case <strong>of</strong> emergency involving serious<br />
shortage in oil supplies, contribute, by decision <strong>of</strong> <strong>the</strong> Government,<br />
to a sharing program by adding to normal supplies to<br />
Participating Countries <strong>of</strong> <strong>the</strong> Agency such additional deliveries<br />
as may be obtained from appropriate demand restraint measures<br />
and from <strong>the</strong> activation <strong>of</strong> any stand-by production capacity<br />
that may exist.<br />
This provision reserves to Norway <strong>the</strong> exclusive decision on whe<strong>the</strong>r or not to<br />
participate in applications <strong>of</strong> <strong>the</strong> sharing programme. When Norway<br />
participates, its contribution <strong>of</strong> oil is to include its normal supplies to <strong>IEA</strong><br />
countries augmented by additional deliveries obtained by means <strong>of</strong> oil demand<br />
restraint measures and activation <strong>of</strong> stand-by oil production. This departs from<br />
<strong>the</strong> commitments <strong>of</strong> Members to activate oil sharing fully under <strong>the</strong> Emergency<br />
Sharing System in application <strong>of</strong> <strong>the</strong> I.E.P. procedures and to share available oil<br />
without <strong>the</strong> kinds <strong>of</strong> source limitations that apply to Norway. Under Article 2<br />
Norway agrees to enter into consultations with <strong>the</strong> Agency “with a view to<br />
specifying its contribution referred to in Article 1 whenever <strong>the</strong> Agency<br />
considers <strong>the</strong> activation <strong>of</strong> emergency measures. . .”. Under <strong>the</strong> Governing<br />
Board’s later “Decision on Institutional Arrangements for <strong>the</strong> Participation <strong>of</strong><br />
Norway” (referred to as <strong>the</strong> “Norway Decision”), adopted on 7 March 1975<br />
[<strong>IEA</strong>/GB(75)15, Item 10(a) and Annex IV, paragraph 5] <strong>the</strong> Board decided this:<br />
In cases <strong>of</strong> emergency in which Norway decides to contribute to<br />
<strong>the</strong> Agency’s oil sharing programme pursuant to Article 1 <strong>of</strong> <strong>the</strong><br />
Participation Agreement, <strong>the</strong> participation <strong>of</strong> Norway in <strong>the</strong><br />
work <strong>of</strong> <strong>the</strong> Agency under Chapters I through IV (<strong>the</strong> emergency<br />
sharing Chapters) shall be implemented pursuant to fur<strong>the</strong>r<br />
arrangements which shall be adopted by <strong>the</strong> Governing Board,<br />
in <strong>the</strong> light <strong>of</strong> <strong>the</strong> nature and extent <strong>of</strong> Norway’s contribution,<br />
after considering <strong>the</strong> recommendations <strong>of</strong> <strong>the</strong> Standing Group<br />
on Emergency Questions and in agreement with Norway.<br />
107
Parallel provision was made in paragraph 4 <strong>of</strong> <strong>the</strong> Norway Decision<br />
for Norwegian involvement in <strong>the</strong> Agency’s preparatory work on oil<br />
emergency responses. By an exchange <strong>of</strong> letters with <strong>the</strong> Agency, <strong>the</strong><br />
Government <strong>of</strong> Norway gave its agreement to <strong>the</strong> Decision on Norway [See<br />
<strong>IEA</strong>/GB(75)22, Annexes I and II and <strong>IEA</strong>/GB(75)25, Item 7].<br />
As a practical matter Norway participates regularly, much in <strong>the</strong> same<br />
way as Members do, in <strong>the</strong> work <strong>of</strong> <strong>the</strong> Standing Group on Emergency<br />
Questions, in tests <strong>of</strong> <strong>the</strong> response systems and in data reporting to <strong>the</strong> <strong>IEA</strong>.<br />
For example, Norway adhered to <strong>the</strong> Agency’s important Decision on<br />
“Stocks and Supply Disruptions” adopted on 11 July 1984 [<strong>IEA</strong>/GB(84)27,<br />
Item 2(a) and Annex I; <strong>IEA</strong>/GB(84)42, Item 3(b)(ii)] which, toge<strong>the</strong>r with<br />
<strong>the</strong> Oil Sharing provisions <strong>of</strong> <strong>the</strong> I.E.P. Agreement, constitutes <strong>the</strong> main<br />
framework for <strong>IEA</strong> response to oil supply disruptions.<br />
In <strong>the</strong> cases <strong>of</strong> oil supply disruption which have arisen since <strong>the</strong><br />
Norway Participation Agreement was entered into, representatives <strong>of</strong><br />
Norway have participated fully in Agency discussions and preparations, but<br />
since <strong>the</strong> Sharing System has not been triggered up to <strong>the</strong> date <strong>of</strong> this<br />
writing, <strong>the</strong>re has been no occasion to make <strong>the</strong> arrangements foreseen in<br />
paragraph 5 quoted above. Norway fully participated in <strong>the</strong> Agency’s work<br />
on <strong>the</strong> oil supply situation during <strong>the</strong> Gulf Crisis in 1990-1991 and on 11<br />
January 1991 it joined with all <strong>IEA</strong> Members, plus Finland, France and<br />
Iceland, in <strong>the</strong> <strong>IEA</strong> Co-ordinated Energy Emergency Response Contingency<br />
Plan to respond to that crisis. When that Plan was activated on 17 January<br />
1991, Norway announced that <strong>the</strong> Norwegian contribution would comprise<br />
elements <strong>of</strong> oil conservation and stock draw.<br />
Beyond <strong>the</strong> foregoing actions related to oil supply disruption<br />
preparation and response, Norway’s participation in <strong>the</strong> <strong>IEA</strong> is almost<br />
indistinguishable from that <strong>of</strong> <strong>the</strong> regular Members. Under Article 3 <strong>of</strong> <strong>the</strong><br />
Norway Participation Agreement, Norway is to “have <strong>the</strong> obligations and<br />
enjoy <strong>the</strong> rights <strong>of</strong> a Participating Country for <strong>the</strong> purposes <strong>of</strong> <strong>the</strong> following<br />
Chapters <strong>of</strong> <strong>the</strong> Agreement on an International Energy Program:<br />
Chapter V:<br />
Chapter VI:<br />
Chapter VII:<br />
Chapter VIII:<br />
Information System on <strong>the</strong> International Oil Market<br />
Framework for Consultation with Oil Companies<br />
Long Term Co-operation on Energy<br />
Relations with Producer Countries and with o<strong>the</strong>r<br />
Consumer Countries.<br />
<strong>The</strong>se Chapters represent all <strong>of</strong> <strong>the</strong> substantive Chapters <strong>of</strong> <strong>the</strong> I.E.P. Agreement<br />
with <strong>the</strong> exception <strong>of</strong> <strong>the</strong> Emergency Sharing System contained in<br />
108
Chapters I to IV inclusive. In fact Norway has participated fully in <strong>the</strong><br />
Agency’s work in all <strong>of</strong> those Chapters and has adhered specifically to <strong>the</strong><br />
major Governing Board actions, such as <strong>the</strong> Long-Term Co-operation<br />
Programme [See <strong>IEA</strong>/GB(76)24, Item 10(a) and Annex II], and <strong>the</strong> Decision<br />
on Group Objectives and Principles <strong>of</strong> Energy Policy [See <strong>IEA</strong>/GB(78)32,<br />
Item 8 and Annex IV]. <strong>The</strong> Secretariat has not insisted upon specific<br />
adherence by Norway. In <strong>the</strong> same practice that applies to regular Members,<br />
<strong>the</strong> Secretariat has considered that Norway’s participation was assured,<br />
where adherence was required, unless a contrary intention was expressed.<br />
Norway has thus participated in <strong>the</strong> consensus procedure <strong>of</strong> <strong>the</strong> <strong>IEA</strong> in <strong>the</strong><br />
same way that Members have, whe<strong>the</strong>r unanimity or majority was required.<br />
O<strong>the</strong>r institutional arrangements for Norway have been made in some<br />
detail, on such matters as <strong>the</strong> invitation to Norway to participate in <strong>the</strong><br />
Governing Board and subordinate organs, <strong>the</strong> provision for Norway’s<br />
contributions to <strong>the</strong> costs <strong>of</strong> <strong>the</strong> Agency to be <strong>the</strong> same as for Members<br />
under <strong>the</strong> I.E.P. Agreement and <strong>the</strong> legislative implementation by Norway<br />
[Articles 4, 5 and 7 respectively <strong>of</strong> <strong>the</strong> Norway Participation Agreement].<br />
In <strong>the</strong> Institutional Arrangements Decision <strong>the</strong> practical implications are<br />
foreseen in more detail. On <strong>the</strong> same basis as Members, Norway is entitled<br />
to participate in plenary and restricted organs <strong>of</strong> <strong>the</strong> Agency, including <strong>the</strong><br />
right to be represented, to participate in discussions and to make proposals,<br />
and to receive agendas and o<strong>the</strong>r documents for such meetings [<strong>The</strong><br />
Norway Decision’s provisions on voting and adherence <strong>of</strong> Norway to<br />
Governing Board decisions are discussed in connection with voting generally<br />
in <strong>the</strong> Governing Board in Chapter V, Section A-13 below]. Under<br />
paragraph 6 <strong>of</strong> <strong>the</strong> Norway Decision, Norway enjoys <strong>the</strong> right to participate<br />
in <strong>IEA</strong> “special activities” in accordance with Articles 64.2 and 65 <strong>of</strong> <strong>the</strong><br />
I.E.P. Agreement, and it regularly does so in <strong>the</strong> <strong>IEA</strong> energy research and<br />
development Implementing Agreements. Moreover, in <strong>the</strong> same way as<br />
Members, Norway participates in <strong>the</strong> meetings <strong>of</strong> all Standing Groups,<br />
Committees and o<strong>the</strong>r bodies. Norwegians have served <strong>the</strong> Agency as Vice-<br />
Chairman <strong>of</strong> <strong>the</strong> Governing Board (Ambassador A. Wal<strong>the</strong>r), Chairman <strong>of</strong><br />
<strong>the</strong> Committee on Non-Member Countries (Ambassador A. Wal<strong>the</strong>r and<br />
Ambassador J. Dahl) and <strong>the</strong> Standing Group on <strong>the</strong> Oil Market (Mr. G.<br />
Vatten). A number <strong>of</strong> Norwegians have served in <strong>the</strong> <strong>IEA</strong> Secretariat,<br />
including Ambassador B. Barth as Director <strong>of</strong> <strong>the</strong> Office <strong>of</strong> Oil Market<br />
Developments.<br />
<strong>The</strong> combination <strong>of</strong> institutional and legal arrangements described<br />
above has integrated Norway into <strong>the</strong> <strong>IEA</strong> without risking a potential<br />
weakening <strong>of</strong> <strong>the</strong> basic elements <strong>of</strong> <strong>the</strong> Emergency Sharing System. <strong>The</strong><br />
109
provisions needed by Norway were included in a separate international<br />
agreement without directly affecting <strong>the</strong> I.E.P. Agreement, and <strong>the</strong> rest <strong>of</strong><br />
<strong>the</strong> terms <strong>of</strong> participation, parallel to <strong>the</strong> obligations and rights <strong>of</strong> Members,<br />
were arranged in a fashion which ensured that Norway would be a Member<br />
in all but name. In time Norway has become for <strong>the</strong> most part indistinguishable<br />
from regular Members. It has been increasingly identified with<br />
<strong>the</strong> Agency and included in <strong>of</strong>ficial and un<strong>of</strong>ficial references to “<strong>IEA</strong><br />
Countries”.<br />
4. Federal States<br />
Federal states have presented a number <strong>of</strong> <strong>IEA</strong> relationships questions,<br />
typically <strong>the</strong> relations between <strong>the</strong> Agency and <strong>the</strong> constituent states <strong>of</strong> a<br />
federation and with <strong>the</strong> federal state as such. <strong>The</strong> Contracting Parties to <strong>the</strong><br />
I.E.P. Agreement — and thus <strong>the</strong> Members <strong>of</strong> <strong>the</strong> Agency — are currently<br />
all “states” in <strong>the</strong> international law sense, that is to say, under generally<br />
accepted definitions: recognized persons <strong>of</strong> international law having a permanent<br />
population, a defined territory, government, sovereign<br />
independence and capacity to enter into relations with o<strong>the</strong>r states [See<br />
Brownlie, Principles <strong>of</strong> Public International Law, 4th Ed. 1990 p. 72, and<br />
authorities cited]. <strong>The</strong> I.E.P. Agreement Signatories (<strong>the</strong> original sixteen<br />
Members) were characterized as “States” in Article 1.2 and in Article 67.<br />
All clearly qualified as “states” in <strong>the</strong> international law sense, as have all<br />
Members who have since joined by accession (<strong>the</strong>y are so characterized in<br />
Article 71.2).<br />
<strong>The</strong> only potential exception under <strong>the</strong> two <strong>IEA</strong> legal texts is <strong>the</strong><br />
European Communities [European Union; this terminology is discussed in<br />
Section D-3 below], which are not regarded as a state in <strong>the</strong> traditional<br />
international law sense. <strong>The</strong>y do enjoy international legal personality, and<br />
by virtue <strong>of</strong> Article 210 and <strong>the</strong> o<strong>the</strong>r provisions <strong>of</strong> <strong>the</strong> Treaty <strong>of</strong> Rome, <strong>the</strong>y<br />
hold <strong>the</strong> power to enter into relations with states and international<br />
organizations. Under I.E.P. Article 72.1 and Council Decision Article 3 <strong>the</strong><br />
Communities are granted <strong>the</strong> right to accede to those two instruments, but<br />
have not done so. While <strong>the</strong> Communities may be characterized as a<br />
“Regional Economic Integration Organization”, as <strong>the</strong>y are in <strong>the</strong> European<br />
Energy Charter, ra<strong>the</strong>r than “states” in <strong>the</strong> international law sense, <strong>the</strong>y are<br />
<strong>the</strong> only non-state entity qualified by <strong>the</strong> <strong>IEA</strong> texts to accede to <strong>the</strong> I.E.P.<br />
Agreement and <strong>the</strong> Council Decision. However, <strong>the</strong> Communities are in a<br />
singular situation with respect to <strong>the</strong> Agency [See Section D-3 below], and<br />
need not be considered as a Federal state for present purposes.<br />
110
Nothing in <strong>the</strong> I.E.P. Agreement makes any specific distinction<br />
between federal and unitary states in <strong>the</strong>ir relations with <strong>the</strong> Agency. All<br />
I.E.P. commitments thus run to <strong>the</strong> national states <strong>the</strong>mselves as Members<br />
<strong>of</strong> <strong>the</strong> <strong>IEA</strong> without formal exception for internal political unit relationships.<br />
Indeed <strong>the</strong> obligation <strong>of</strong> Members under Article 66 to “take <strong>the</strong> necessary<br />
measures, including any necessary legislative measures, to implement this<br />
Agreement and decisions taken by <strong>the</strong> Governing Board” would require<br />
Members to take any legislative measures necessary to remove any internal<br />
federal arrangements which might stand in <strong>the</strong> way <strong>of</strong> <strong>the</strong> implementation<br />
commitment. This corresponds to <strong>the</strong> general rule which is formulated in<br />
Article 27 <strong>of</strong> <strong>the</strong> Vienna Convention on <strong>the</strong> Law <strong>of</strong> Treaties: “A party may<br />
not invoke <strong>the</strong> provisions <strong>of</strong> its internal law as justification for its failure to<br />
perform a treaty.”<br />
<strong>The</strong> formal relation <strong>of</strong> “states” to <strong>the</strong> Agency is not changed by ei<strong>the</strong>r <strong>of</strong><br />
<strong>the</strong> two geographical references which are contained in <strong>the</strong> I.E.P. Agreement.<br />
<strong>The</strong> first <strong>of</strong> <strong>the</strong>se is Article 17.2 which provides for allocation <strong>of</strong> oil to take<br />
place when <strong>the</strong> selective trigger shortfall in oil supplies is “in a major region<br />
<strong>of</strong> a Participating Country whose oil market is incompletely integrated”; but<br />
since that “major region” does not necessarily correspond to a federal component,<br />
this Article does not bear on <strong>the</strong> federal state question. <strong>The</strong> second<br />
geographical reference is in Article 70.1 which deals with <strong>the</strong> application <strong>of</strong><br />
<strong>the</strong> Agreement to territories for which <strong>the</strong> Member is responsible, a matter<br />
which also falls away from <strong>the</strong> federal-unitary state distinction.<br />
Almost one-third <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Members have a federal structure: <strong>the</strong>y<br />
are Austria, Australia, Belgium, Canada, Germany, Switzerland and <strong>the</strong><br />
United States. <strong>The</strong> pertinent question to be asked is whe<strong>the</strong>r or not <strong>the</strong><br />
federal structure <strong>of</strong> those states has had any material bearing upon <strong>the</strong>ir<br />
relationship to <strong>the</strong> Agency. None <strong>of</strong> those federal states lodged formal<br />
reservations to <strong>the</strong> I.E.P. Agreement at <strong>the</strong> time <strong>of</strong> <strong>the</strong>ir signature or deposit<br />
<strong>of</strong> <strong>the</strong> consent to be bound, but Canada and Australia made declarations<br />
touching on <strong>the</strong> federal question [For fuller discussion <strong>of</strong> <strong>the</strong> situation <strong>of</strong><br />
<strong>the</strong>se Members, see Chapter III, Section F above]. At <strong>the</strong> time <strong>of</strong> joining<br />
<strong>the</strong> Agency, it was clear that both Canada and Australia intended to apply<br />
<strong>the</strong> I.E.P. Agreement to <strong>the</strong> extent that it was not incompatible with <strong>the</strong>ir<br />
respective constitutional systems, which are federal. However, since this<br />
was not considered to exclude or modify in any way <strong>the</strong> legal effects <strong>of</strong> <strong>the</strong><br />
Agreement itself, no formal reservation was made. <strong>The</strong> Agency is thus<br />
entitled to look to each national Member state as <strong>the</strong> entity responsible for<br />
meeting <strong>the</strong> responsibilities <strong>of</strong> Members and as <strong>the</strong> point <strong>of</strong> contact in<br />
relations with <strong>the</strong> Agency.<br />
111
While it must be concluded that all I.E.P. commitments are fully<br />
binding on all Members without exception for federal states and without<br />
modification by virtue <strong>of</strong> Members’ declarations and o<strong>the</strong>r statements, all<br />
Members’ constitutional limitations and requirements affect <strong>the</strong> policies<br />
<strong>the</strong>y pursue and <strong>the</strong> commitments <strong>the</strong>y are prepared to take under <strong>IEA</strong><br />
auspices. This is as true for unitary as it is for federal states. However, for<br />
federal states <strong>the</strong>re do arise fur<strong>the</strong>r potential questions about relationships.<br />
Where Members with a federal system have constituent states holding<br />
exclusive or concurrent power over energy resources or extensive legislative<br />
powers in <strong>the</strong> energy field, it goes without saying that <strong>the</strong> national state <strong>IEA</strong><br />
Member takes those elements into account when it considers commitments<br />
made in <strong>the</strong> Agency. This was <strong>the</strong> case, for example, for <strong>the</strong> <strong>IEA</strong> Long-Term<br />
Co-operation Programme (<strong>the</strong> “LTCP”). First Canada and <strong>the</strong>n Australia<br />
voiced constitutional questions about accepting <strong>the</strong> LTCP. Nei<strong>the</strong>r could<br />
accept Chapter V <strong>of</strong> <strong>the</strong> LTCP which is entitled “Legislative and<br />
Administrative Obstacles and Discriminatory Practices” and contains<br />
commitments, among o<strong>the</strong>rs, for <strong>IEA</strong> Members not to afford to nationals <strong>of</strong><br />
o<strong>the</strong>r <strong>IEA</strong> countries “less favorable treatment than that afforded to<br />
nationals <strong>of</strong> <strong>the</strong>ir own countries, in particular with regard to energy<br />
investments, <strong>the</strong> purchase and sale <strong>of</strong> energy, and <strong>the</strong> enforcement <strong>of</strong> rules<br />
<strong>of</strong> competition”. For both countries <strong>the</strong>re were constitutional considerations<br />
as well as policy reasons for <strong>the</strong>ir inability to accept Chapter V. Canada<br />
needed to address <strong>the</strong> question <strong>of</strong> its provinces which had constitutional<br />
responsibilities for energy resources within <strong>the</strong>ir boundaries, which had <strong>the</strong><br />
effect <strong>of</strong> restricting that Member’s actions on energy investment, production<br />
and marketing policies. Australia had both constitutional and policy<br />
questions concerning Chapter V <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s Long-Term Co-operation<br />
Programme.<br />
In measures like <strong>the</strong> LTCP which contain new commitments, all <strong>IEA</strong><br />
Members, whe<strong>the</strong>r federal or unitary states, remain free to participate or<br />
not, and <strong>the</strong> Members are entitled to consider structural, legal or policy<br />
elements in reaching <strong>the</strong>ir conclusions. With respect to measures which<br />
concern <strong>the</strong> management <strong>of</strong> <strong>the</strong> I.E.P. or contain only recommendations<br />
or actions on procedural questions on which a Member might <strong>the</strong>oretically<br />
be outvoted by a majority under Article 61, federal states would not seem<br />
to risk serious constitutional problems. Up to <strong>the</strong> present time, <strong>the</strong> failure<br />
<strong>of</strong> some Members to accept an action for constitutional reasons has<br />
perhaps given rise more to policy disappointment on <strong>the</strong> part <strong>of</strong> <strong>the</strong> o<strong>the</strong>r<br />
Members and <strong>the</strong> Secretariat than to serious operational difficulty for <strong>the</strong><br />
Agency.<br />
112
In addition to such questions about <strong>the</strong> ability <strong>of</strong> federal states to take<br />
action in <strong>the</strong> <strong>IEA</strong> that unitary states may take with relative constitutional<br />
ease, <strong>the</strong>re are o<strong>the</strong>r federal-state problems, some with practical or<br />
operational implications. Clearly <strong>the</strong> constituent states <strong>of</strong> a federated Member<br />
do not have <strong>the</strong> right <strong>of</strong> representation separate from that <strong>of</strong> <strong>the</strong> Member<br />
itself. <strong>The</strong>re are no known cases where such representation has been sought<br />
or has been considered by an <strong>IEA</strong> body. Only <strong>the</strong> national state <strong>of</strong> <strong>the</strong><br />
federation is recognized as <strong>the</strong> Member. However, nothing would prevent <strong>the</strong><br />
national state from taking into its delegations to <strong>IEA</strong> meetings <strong>of</strong>ficials <strong>of</strong> <strong>the</strong><br />
several states <strong>of</strong> a federation, and <strong>the</strong>y can be permitted to speak, but only as<br />
national ra<strong>the</strong>r than constituent state representatives. Constituent states are<br />
not qualified as such to submit <strong>of</strong>ficial documents to <strong>IEA</strong> bodies, but state<br />
documents may be submitted by Members as part <strong>of</strong> <strong>the</strong> national submission.<br />
Particular state concerns are regularly considered in <strong>IEA</strong> body discussions; in<br />
<strong>the</strong> case <strong>of</strong> <strong>the</strong> United States, for example, oil problems <strong>of</strong> Alaska and<br />
California receive specific attention at times. State taxation <strong>of</strong> energy is not<br />
ignored by <strong>the</strong> Agency, nor are state energy policies and legislation; innovative<br />
environment work in California is a good example <strong>of</strong> this. Constituent states<br />
have contributed to work under energy R & D Implementing Agreements, and<br />
<strong>the</strong>re is no formal reason why a state could not be designated by <strong>the</strong> Member<br />
to serve as a Contracting Party in those Agreements if <strong>the</strong> occasion should<br />
arise. On staffing questions, <strong>the</strong> Member is <strong>the</strong> sole <strong>of</strong>ficial contact point, but<br />
energy experts eligible for <strong>IEA</strong> appointment have been hired from state<br />
institutions, in much <strong>the</strong> same way as <strong>the</strong>y have from public and private<br />
institutions, companies and o<strong>the</strong>r entities.<br />
On a less formal basis, <strong>the</strong>re are many <strong>IEA</strong> activities in which <strong>the</strong><br />
constituent states actively participate, particularly those states which have<br />
developed energy policy programmes or structures. In some sectors,<br />
mutually beneficial “working relations” between <strong>the</strong> state authorities and<br />
<strong>the</strong> <strong>IEA</strong> Secretariat have developed. Under national mechanisms or<br />
sponsorship, those relationships have been quite extensive in some sectors.<br />
With respect to <strong>the</strong> <strong>IEA</strong> Emergency Sharing System, for example, <strong>the</strong><br />
California Energy Commission has participated extensively in several <strong>of</strong> <strong>the</strong><br />
Allocation Systems Tests. In <strong>the</strong> <strong>IEA</strong> energy policy country reviews <strong>the</strong>re is<br />
considerable interaction between <strong>the</strong> Secretariat and <strong>the</strong> constituent states.<br />
<strong>IEA</strong> review teams at times interview state energy <strong>of</strong>ficials on <strong>the</strong><br />
implementation <strong>of</strong> relevant national and state activities. <strong>The</strong> Secretariat is<br />
thus enabled to report and advise on particular questions which arise in<br />
<strong>the</strong> federal state relationships in <strong>the</strong> energy sector, with a view to <strong>the</strong><br />
effective reporting on <strong>the</strong> country review. More broadly speaking, <strong>the</strong>re is a<br />
113
well developed intellectual exchange between <strong>the</strong> state <strong>of</strong>ficials and <strong>the</strong><br />
Secretariat, including advice to <strong>the</strong> Secretariat on experience in <strong>the</strong> states<br />
and <strong>the</strong> development <strong>of</strong> approaches to problems, such as energy security<br />
and environment issues, demand side management and resource planning.<br />
<strong>The</strong> states also seek information from <strong>the</strong> Secretariat in many sectors <strong>of</strong> <strong>the</strong><br />
work <strong>of</strong> <strong>the</strong> Agency. <strong>The</strong>se exchanges take place by personal contacts, visits<br />
to <strong>the</strong> <strong>IEA</strong> <strong>of</strong>fices, missions by members <strong>of</strong> <strong>the</strong> Secretariat, and participation<br />
in <strong>IEA</strong> conferences and working groups by state <strong>of</strong>ficials who have on<br />
occasion given papers, chaired sessions and presented keynote addresses.<br />
This being said, it must be recalled that in relation to <strong>the</strong> <strong>IEA</strong> only <strong>the</strong><br />
Member is <strong>the</strong> responsible party. If measures implementing Agency<br />
requirements are to be established under state auspices in a Member<br />
country, <strong>the</strong> Member is required to ensure that this is accomplished, for <strong>the</strong><br />
<strong>IEA</strong> does not look to <strong>the</strong> individual states. Thus Members cannot satisfy<br />
<strong>IEA</strong> commitments by delegating responsibilities to <strong>the</strong>ir constituent states,<br />
because a failure <strong>of</strong> performance in such cases would remain <strong>the</strong><br />
responsibility <strong>of</strong> <strong>the</strong> Member. <strong>The</strong> states have important roles to play in <strong>the</strong><br />
overall <strong>IEA</strong> process, but <strong>the</strong> procedures applicable to federated Members<br />
have been respected in <strong>IEA</strong> practice.<br />
5. Territorial Changes: Germany<br />
Territorial changes <strong>of</strong> Members have not presented a major problem for <strong>the</strong><br />
<strong>IEA</strong>. Normally in international organization practice, changes in a<br />
Member’s territory are recognized without difficulty if <strong>the</strong> change takes<br />
place peacefully with <strong>the</strong> consent <strong>of</strong> <strong>the</strong> affected population, without<br />
question <strong>of</strong> violation <strong>of</strong> international law and without substantial<br />
international opposition. For <strong>the</strong> <strong>IEA</strong> <strong>the</strong>re were no institutionally<br />
significant territorial changes until <strong>the</strong> unification <strong>of</strong> Germany on 3 October<br />
1990, and <strong>the</strong> enlarged Germany has since been fully accommodated in <strong>the</strong><br />
<strong>IEA</strong> [See Chapter III, Section J above].<br />
6. Policy Considerations and Recent Developments<br />
<strong>The</strong> membership policy <strong>of</strong> <strong>the</strong> Agency in <strong>the</strong> period up to <strong>the</strong> time <strong>of</strong> <strong>the</strong><br />
dramatic changes in Central and Eastern Europe in <strong>the</strong> early 1990s was<br />
simple and straightforward. All <strong>of</strong> <strong>the</strong> Members were <strong>the</strong>mselves industrial,<br />
market economy countries with democratic political systems; <strong>the</strong>y have<br />
sometimes been characterized as <strong>the</strong> principal oil consumers who grouped<br />
toge<strong>the</strong>r to enhance <strong>the</strong>ir energy security and to co-operate on a broad<br />
114
ange <strong>of</strong> energy policy questions <strong>of</strong> interest to <strong>the</strong>m. <strong>The</strong>re was no<br />
expectation or perceived need to enlarge that membership beyond <strong>the</strong> major<br />
industrial oil consumer group which also constituted <strong>the</strong> membership <strong>of</strong> <strong>the</strong><br />
OECD. This notion <strong>of</strong> Agency membership was institutionalized from <strong>the</strong><br />
outset by <strong>the</strong> limitation <strong>of</strong> access to <strong>the</strong> Agency to Members <strong>of</strong> <strong>the</strong> OECD<br />
[See Sections 1 and 2 above for references to <strong>the</strong> texts]. In <strong>1974</strong> <strong>the</strong><br />
limitation <strong>of</strong> membership to OECD Members who were willing and able to<br />
join <strong>the</strong> <strong>IEA</strong> eliminated without question <strong>the</strong> command economy countries<br />
<strong>of</strong> Central and Eastern Europe and elsewhere, as well as <strong>the</strong> developing<br />
countries and o<strong>the</strong>rs. <strong>The</strong>re had never been any question <strong>of</strong> widening <strong>the</strong><br />
scope <strong>of</strong> <strong>the</strong> <strong>IEA</strong> membership to include any <strong>of</strong> <strong>the</strong> oil producer countries<br />
grouped in OPEC. <strong>The</strong> scope for enlargement beyond <strong>the</strong> original sixteen<br />
Members was accordingly quite limited, and this carried <strong>the</strong> advantage <strong>of</strong><br />
maintaining <strong>the</strong> <strong>IEA</strong> as a coherent group focused on energy policy and<br />
operational questions <strong>of</strong> importance to <strong>the</strong> entire membership in a context<br />
where each Member’s political, economic and energy outlook had strong<br />
points in common with that <strong>of</strong> all o<strong>the</strong>r Members <strong>of</strong> <strong>the</strong> Agency.<br />
As a consequence <strong>IEA</strong> membership questions were readily manageable<br />
during <strong>the</strong> period up to <strong>the</strong> 1990s. <strong>The</strong> manifest policy was to bring into <strong>the</strong><br />
Agency all <strong>of</strong> <strong>the</strong> OECD’s twenty-four Member countries if possible and as<br />
soon as practicable. Efforts were regularly made to ease <strong>the</strong> way for <strong>the</strong><br />
eight OECD Members which were not original <strong>IEA</strong> Members. While some<br />
required only a brief period to complete policy consultations before taking<br />
<strong>the</strong> formal steps (New Zealand and Greece), o<strong>the</strong>rs found in time <strong>the</strong>ir<br />
energy situations and policies evolving more closely to those <strong>of</strong> <strong>IEA</strong> countries<br />
(Australia and Portugal), and for still o<strong>the</strong>rs hesitations associated with<br />
political perceptions related to <strong>the</strong> <strong>IEA</strong> eventually gave way in <strong>the</strong> evolving<br />
context <strong>of</strong> international relations and <strong>the</strong> role <strong>of</strong> <strong>the</strong> Agency (Finland and<br />
France). <strong>The</strong>y were all encouraged to join <strong>the</strong> Agency, and <strong>the</strong> Secretariat<br />
saw that its role was to be as forthcoming and as helpful as possible in <strong>the</strong><br />
membership process outlined above in Section A-2.<br />
During that period <strong>of</strong> almost twenty years, <strong>the</strong>re were a few contacts<br />
on membership questions by non-Members from outside <strong>of</strong> <strong>the</strong> OECD<br />
group, but <strong>the</strong> fixed policy limiting membership to OECD countries gave<br />
o<strong>the</strong>rs little basis for encouragement. New policy considerations and<br />
opportunities later brought about a reconsideration <strong>of</strong> that approach, at<br />
least in <strong>the</strong> abstract, as Central and Eastern European countries as well as a<br />
number <strong>of</strong> rapidly industrializing non-OECD countries in Asia and Latin<br />
America began to express interest in establishing closer relations with <strong>the</strong><br />
Agency. <strong>The</strong> <strong>IEA</strong> response was to review <strong>the</strong> wide scope <strong>of</strong> issues associated<br />
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with <strong>the</strong> relations with non-Members and to <strong>of</strong>fer an enlarged range <strong>of</strong><br />
activities carried out directly with interested non-Member countries [See<br />
Section D below]. Review <strong>of</strong> membership policy was not excluded from this<br />
process <strong>of</strong> re-evaluation.<br />
At <strong>the</strong> <strong>IEA</strong> Ministerial Level meeting held on 4 June 1993, Ministers<br />
noted that <strong>the</strong> Agency’s pursuit <strong>of</strong> energy security had been enlarged to<br />
include “more intensive contacts with Non-Member countries” and that one<br />
<strong>of</strong> <strong>the</strong> reasons for <strong>the</strong>se contacts was that:<br />
A growing number <strong>of</strong> non-Member countries are reaching a<br />
stage <strong>of</strong> transition or development that is drawing <strong>the</strong>m closer<br />
to <strong>the</strong> OECD world and prompting collaboration between <strong>the</strong>m<br />
and <strong>the</strong> <strong>IEA</strong> [Communiqué, <strong>IEA</strong>/Press(93)8, p. 9].<br />
Collaboration between <strong>the</strong> Agency and a number <strong>of</strong> non-Member countries<br />
continued to grow throughout <strong>the</strong> year 1993, leading to a systematic<br />
assessment <strong>of</strong> those relations by <strong>the</strong> Secretariat in <strong>the</strong> autumn <strong>of</strong> that year.<br />
<strong>The</strong> Secretariat noted that <strong>the</strong> Agency can serve as a policy adviser for non-<br />
Member countries through a number <strong>of</strong> institutional mechanisms and by<br />
o<strong>the</strong>r means which include special energy seminars, workshops, surveys,<br />
policy dialogues, selective participation in certain <strong>IEA</strong> meetings and<br />
participation in <strong>IEA</strong> energy R & D Implementing Agreements, all in<br />
accordance with <strong>IEA</strong> rules and policies. In developing those relations <strong>the</strong><br />
Agency has also considered <strong>the</strong> potential for future extended membership <strong>of</strong><br />
<strong>the</strong> Agency. Korea, Mexico, <strong>The</strong> Czech Republic, Hungary and Poland<br />
might be potential candidates for membership <strong>of</strong> <strong>the</strong> <strong>IEA</strong> [See<br />
<strong>IEA</strong>/GB(93)47]. At its 19 October 1993 meeting, <strong>the</strong> Governing Board<br />
noted <strong>the</strong> Secretariat’s assessment document and “endorsed <strong>the</strong> selective<br />
and balanced approach <strong>of</strong> <strong>the</strong> Secretariat in its work with non-Member<br />
countries” [<strong>IEA</strong>/GB(93)57, Item 4].<br />
B. Obligations <strong>of</strong> Members<br />
1. Commitments Directly Under <strong>the</strong> I.E.P. Agreement<br />
Among <strong>the</strong> most important sets <strong>of</strong> relationships in <strong>the</strong> <strong>IEA</strong> is <strong>the</strong> body <strong>of</strong><br />
reciprocal legal and political commitments which Members have taken with<br />
each o<strong>the</strong>r. <strong>The</strong>se commitments appear above all in <strong>the</strong> International Energy<br />
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Program which is contained in a multilateral international agreement, <strong>the</strong><br />
I.E.P. Agreement to which twenty-two state parties are now bound by <strong>the</strong>ir<br />
signature or accession and consents to be bound. With Norway, which participates<br />
under o<strong>the</strong>r but mostly parallel arrangements, <strong>the</strong> total is twentythree.<br />
In addition to institutional arrangements and formal provisions, <strong>the</strong><br />
I.E.P. contains a body <strong>of</strong> obligations binding directly on <strong>the</strong> Member governments<br />
<strong>of</strong> <strong>the</strong> Agency in accordance with <strong>the</strong> international law <strong>of</strong> treaties.<br />
<strong>The</strong> international legal obligations arise in accordance with Articles 26<br />
and 27 <strong>of</strong> <strong>the</strong> Vienna Convention on <strong>the</strong> Law <strong>of</strong> Treaties which provide that:<br />
Article 26<br />
Pacta sunt servanda<br />
Every treaty in force is binding upon <strong>the</strong> parties to it and must<br />
be performed by <strong>the</strong>m in good faith.<br />
Article 27<br />
Internal law and observance <strong>of</strong> treaties<br />
A party may not invoke <strong>the</strong> provisions <strong>of</strong> its internal law as<br />
justification for its failure to perform a treaty.<br />
<strong>The</strong> I.E.P. Agreement obligations <strong>of</strong> all Members include <strong>the</strong> basic elements<br />
<strong>of</strong> <strong>the</strong> <strong>IEA</strong> Emergency Sharing System and o<strong>the</strong>r provisions bearing directly<br />
upon <strong>the</strong> implementation <strong>of</strong> <strong>the</strong> System:<br />
(a) Stocks. <strong>The</strong>re is an emergency reserve commitment for each<br />
country to maintain stocks at a level sufficient to sustain consumption for at<br />
least 90 days with no net oil imports [See Articles 2-4].<br />
(b) Demand Restraint. Each country is required at all times to<br />
have ready a program <strong>of</strong> contingent oil demand restraint measures enabling<br />
it to reduce its oil consumption to <strong>the</strong> 7%, 10% or higher level as required<br />
by <strong>the</strong> I.E.P. [See Article 5].<br />
(c) Activation. When <strong>the</strong> requisite oil supply reductions occur, each<br />
country is obligated to implement mandatory demand restraint measures,<br />
to reduce consumption by <strong>the</strong> amounts required under <strong>the</strong> I.E.P. (7%, 10%<br />
or more as <strong>the</strong> case may be) and to carry out <strong>the</strong> allocation <strong>of</strong> oil [See<br />
Articles 12-17].<br />
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(d) Allocation. When <strong>the</strong> System is activated, each country is<br />
required pursuant to Article 6 to “take <strong>the</strong> necessary measures in order that<br />
allocation <strong>of</strong> oil will be carried out” pursuant to <strong>the</strong> relevant Chapters <strong>of</strong> <strong>the</strong><br />
I.E.P. [See Chapters I to VI inclusive].<br />
(e) Emergency Meetings. Representatives <strong>of</strong> all <strong>IEA</strong> governments<br />
are required to meet to consider issues raised by an emergency oil situation;<br />
following <strong>the</strong> making <strong>of</strong> <strong>the</strong> emergency finding by <strong>the</strong> Secretariat, <strong>the</strong><br />
Governing Board is required to meet within 2 to 6 days [See Article 19].<br />
(f) Information. Members are required to establish an information<br />
system on <strong>the</strong> general situation <strong>of</strong> <strong>the</strong> oil market and for emergency<br />
situations. Each country is required to make available to <strong>the</strong> Secretariat on<br />
a regular basis:<br />
■<br />
■<br />
information on <strong>the</strong> international oil market and activities <strong>of</strong> oil<br />
companies, on specific subjects set forth in Article 27 and as decided<br />
by <strong>the</strong> Governing Board.<br />
all information necessary to <strong>the</strong> efficient operation <strong>of</strong> emergency<br />
measures; <strong>the</strong> country will ensure that oil companies operating within<br />
its jurisdiction make such information available to it [See Articles 32<br />
and 33].<br />
(g) Framework for Consultation with Oil Companies. Members<br />
are obligated to establish within <strong>the</strong> Agency a permanent framework for<br />
<strong>the</strong>m to consult with and request information from individual oil companies<br />
on all important aspects <strong>of</strong> <strong>the</strong> oil industry [Article 37].<br />
(h) Long-Term Programme. Pursuant to Article 41, Members will<br />
undertake national programmes and promote <strong>the</strong> adoption <strong>of</strong> co-operative<br />
programmes to reduce over <strong>the</strong> longer-term <strong>the</strong>ir dependence on imported oil.<br />
(i) Relations with Producer and o<strong>the</strong>r Consumer Countries.<br />
Members undertake to “endeavor to promote co-operative relations with oil<br />
producing countries and with o<strong>the</strong>r oil consuming countries” and accept a<br />
number <strong>of</strong> commitments to that end [Articles 44-48].<br />
(j) Carry Out Binding Decisions <strong>of</strong> Agency Organs. Decisions<br />
adopted pursuant to <strong>the</strong> I.E.P. Agreement (subject to Articles 61.2 and 65)<br />
are generally “binding on <strong>the</strong> Participating Countries” [See Article 52.1]<br />
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and must be carried out by <strong>the</strong>m in good faith; this applies to decisions <strong>of</strong><br />
<strong>the</strong> Governing Board as well as to <strong>the</strong> decisions <strong>of</strong> any o<strong>the</strong>r <strong>IEA</strong> organ by<br />
delegation from <strong>the</strong> Governing Board.<br />
(k) Financial Contributions. Each country has accepted <strong>the</strong> legal<br />
obligation to make its contribution to <strong>the</strong> common expenses <strong>of</strong> <strong>the</strong> Agency<br />
which are shared on <strong>the</strong> basis <strong>of</strong> a scale calculated according to <strong>the</strong><br />
principles and rules applicable to <strong>the</strong> OECD scales <strong>of</strong> contributions [See<br />
Article 64].<br />
(l) Legislative and O<strong>the</strong>r Measures. Each country has agreed to<br />
take “<strong>the</strong> necessary measures, including any necessary legislative measures,<br />
to implement this Agreement and decisions taken by <strong>the</strong> Governing Board”<br />
[See Article 66].<br />
(m) Support for Actions Required <strong>of</strong> <strong>the</strong> Governing Board. Each<br />
Member country, being a Member <strong>of</strong> <strong>the</strong> Governing Board, is required to<br />
give its support to measures which <strong>the</strong> Governing Board is required to take<br />
under <strong>the</strong> I.E.P. Agreement.<br />
(n) Agency Support and Development. Going beyond <strong>the</strong> specific<br />
obligations referred to above, each Member country has taken <strong>the</strong><br />
commitment, inferred from I.E.P. provisions in <strong>the</strong> aggregate and from <strong>the</strong><br />
responsibilities generally resulting from Agency membership, to endeavor in<br />
a constructive and co-operative spirit to support and develop <strong>the</strong> Agency as<br />
required to realize its objectives.<br />
<strong>The</strong> foregoing compilation indicates <strong>the</strong> principal types <strong>of</strong> intergovernmental<br />
obligations found in <strong>the</strong> I.E.P. Agreement itself. As refined in<br />
<strong>the</strong> Agreement and supplemented by Governing Board decisions, <strong>the</strong>y<br />
constitute legally binding promises which each Member has given to each<br />
o<strong>the</strong>r Member <strong>of</strong> <strong>the</strong> Agency. A number <strong>of</strong> those commitments, such as<br />
those relating to staffing, facilities, infrastructure and financing, have as<br />
<strong>the</strong>ir object <strong>the</strong> normal functioning <strong>of</strong> <strong>the</strong> Agency itself. <strong>The</strong>y also include<br />
<strong>the</strong> broad commitment <strong>of</strong> each Member to carry out its I.E.P. obligations in<br />
a constructive and co-operative spirit, a vitally important commitment<br />
which is difficult to define precisely. <strong>The</strong> foregoing commitments contained<br />
in <strong>the</strong> I.E.P. Agreement are supplemented by o<strong>the</strong>r obligations, at times in<br />
more precise terms, affecting Members’ readily identifiable energy interests,<br />
especially those resulting from Governing Board decisions.<br />
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2. Binding Decisions <strong>of</strong> <strong>the</strong> Governing Board<br />
In <strong>the</strong> <strong>IEA</strong>, Members take commitments not only in <strong>the</strong> I.E.P. Agreement, as<br />
indicated above, but also by decisions <strong>of</strong> <strong>the</strong> Agency’s Governing Board and o<strong>the</strong>r<br />
organs by delegation from <strong>the</strong> Board. <strong>The</strong> <strong>IEA</strong> is one <strong>of</strong> <strong>the</strong> relatively few<br />
international organizations which have been granted broad powers to make<br />
decisions legally binding on <strong>the</strong>ir Member countries. <strong>The</strong>se powers extend not only<br />
to institutional questions, but also to a wide range <strong>of</strong> substantive matters falling<br />
within <strong>the</strong> competence <strong>of</strong> <strong>the</strong> organization. <strong>The</strong> OECD is ano<strong>the</strong>r such<br />
organization, and is so empowered under Article 5 <strong>of</strong> its Convention. In <strong>the</strong> case<br />
<strong>of</strong> <strong>the</strong> <strong>IEA</strong>, this power is derived from <strong>the</strong> I.E.P. Agreement and is recognized in<br />
<strong>the</strong> Council Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency. In <strong>the</strong> I.E.P. Agreement,<br />
Article 51 grants <strong>the</strong> Governing Board full authority to “adopt decisions and make<br />
recommendations which are necessary for <strong>the</strong> proper functioning <strong>of</strong> <strong>the</strong> Program.”<br />
<strong>The</strong> binding character <strong>of</strong> those Governing Board decisions is provided in Article 52.1:<br />
Subject to Article 61, paragraph 2, and Article 65, decisions<br />
adopted pursuant to this Agreement by <strong>the</strong> Governing Board or<br />
by any o<strong>the</strong>r organ by delegation from <strong>the</strong> Board shall be binding<br />
on <strong>the</strong> Participating Countries [Emphasis added; <strong>the</strong> exceptions<br />
are discussed in Chapter V, Section A-16 below where this subject<br />
is considered fur<strong>the</strong>r].<br />
In contrast, Article 52, paragraph 2 provides that “Recommendations shall<br />
not be binding”.<br />
<strong>The</strong> OECD Council Decision contains parallel language in Article 4,<br />
which states that “A Governing Board . . . shall have <strong>the</strong> power to make<br />
recommendations and to take decisions which shall, except as o<strong>the</strong>rwise<br />
provided, be binding upon Participating Countries. . . “ [Emphasis added].<br />
That language follows Article 5(a) and (b) <strong>of</strong> <strong>the</strong> OECD Convention which<br />
provides <strong>the</strong> basis for <strong>the</strong> Council Decision on this point. When decisions are<br />
made in conformity with <strong>the</strong> I.E.P. Agreement, <strong>the</strong>y too have binding effect in<br />
international law, not only under Article 52 <strong>of</strong> <strong>the</strong> Agreement but also under<br />
<strong>the</strong> terms <strong>of</strong> <strong>the</strong> Organisation’s Convention pursuant to <strong>the</strong> rule <strong>of</strong> pacta sunt<br />
servanda, Article 26 <strong>of</strong> <strong>the</strong> Vienna Convention quoted above.<br />
Although <strong>the</strong> Governing Board’s power to make binding decisions is a<br />
broad one indeed, in practice <strong>the</strong> Board has employed its powers more <strong>of</strong>ten<br />
to make declarations and recommendations than to adopt formal and binding<br />
decisions creating international obligations <strong>of</strong> Members. Some <strong>of</strong> <strong>the</strong> major<br />
instances in which <strong>the</strong> Governing Board has applied <strong>the</strong> binding decision<br />
power on substantive energy questions are <strong>the</strong> following:<br />
1<strong>20</strong>
(a) <strong>The</strong> Decision on <strong>the</strong> International Energy Program, <strong>of</strong><br />
18 November <strong>1974</strong> [See Chapter II, Section C-7].<br />
(b) <strong>The</strong> Programme <strong>of</strong> Long-Term Co-operation on Energy (<strong>the</strong><br />
“LTCP”) [<strong>IEA</strong>/GB(76)5, Item 2; LTCP Chapter I, paragraph 1; Chapter<br />
references in this paragraph are to LTCP Chapters]; <strong>the</strong> LTCP obligations to<br />
promote conservation, including group objectives [Chapter II]; accelerated<br />
development <strong>of</strong> alternative sources <strong>of</strong> energy, including <strong>the</strong> conduct <strong>of</strong><br />
periodic reviews <strong>of</strong> national programmes and policies, co-operation on<br />
specific energy sectors and on energy projects; a general measure <strong>of</strong> cooperation<br />
known as <strong>the</strong> Minimum Safeguard Price [Chapter III]; energy<br />
research and development [Chapter IV]; provisions on “identification and<br />
removal <strong>of</strong> legislative and administrative measures which impair <strong>the</strong><br />
achievement <strong>of</strong> <strong>the</strong> overall objectives <strong>of</strong> <strong>the</strong> Programme”; and, in a limited<br />
fashion, a commitment to apply legislative and administrative measures “in<br />
such a way as not to afford to nationals <strong>of</strong> o<strong>the</strong>r Participating Countries less<br />
favorable treatment than that afforded to nationals <strong>of</strong> <strong>the</strong>ir own countries, in<br />
particular with regard to energy investments, <strong>the</strong> purchase and sale <strong>of</strong><br />
energy, and <strong>the</strong> enforcement <strong>of</strong> rules <strong>of</strong> competition” [Chapter V].<br />
(c) <strong>The</strong> Emergency Management Manual (EMM) [<strong>IEA</strong>/GB(76)24,<br />
Item 3(d)]. Though <strong>the</strong> EMM does not change <strong>the</strong> I.E.P. Agreement, it does<br />
contain extensive provisions refining and developing <strong>the</strong> Emergency Sharing<br />
System (but not o<strong>the</strong>r oil supply disruption responses) within <strong>the</strong> terms <strong>of</strong><br />
<strong>the</strong> Agreement and in a manner consistent with it. Some <strong>of</strong> those provisions<br />
are stated in mandatory terms and create legal obligations <strong>of</strong> Members.<br />
Perhaps <strong>the</strong> most far reaching <strong>of</strong> <strong>the</strong>se is <strong>the</strong> decision that Members must<br />
take mandatory “Type 3” allocation actions in cases provided in <strong>the</strong> EMM;<br />
that is to say, that Members may be legally required by a “finding” made by<br />
an <strong>IEA</strong> body (<strong>the</strong> SEQ Emergency Group) to “. . . instruct <strong>the</strong> company<br />
owning <strong>the</strong> oil as to its disposition. . . “ [See EMM, 4th Ed. 1982, p. 32,<br />
Step 9 (iv)].<br />
(d) <strong>The</strong> <strong>IEA</strong> “Co-ordinated Energy Emergency Response<br />
Contingency Plan”. In <strong>the</strong> 1990-1991 Gulf Crisis, <strong>the</strong> Governing Board<br />
adopted this Plan in legally binding form for use in anticipation <strong>of</strong> an oil<br />
supply shortfall in <strong>the</strong> event <strong>of</strong> hostilities in <strong>the</strong> Gulf. In <strong>the</strong> 11 January<br />
1991 Conclusions <strong>the</strong> Board “adopted” <strong>the</strong> Plan and agreed, upon<br />
notification by <strong>the</strong> Executive Director [<strong>IEA</strong>/GB(91)1, Item 3(b) and Annex<br />
paragraph (c)] that:<br />
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. . . each <strong>IEA</strong> Member country, as well as Finland, France and<br />
Iceland, would begin implementation <strong>of</strong> <strong>the</strong>ir commitments<br />
under paragraph (a) above.<br />
This was confirmed at its 28 January 1991 meeting, when <strong>the</strong> Board<br />
Decided that <strong>the</strong> co-ordinated energy emergency contingency<br />
plan, adopted at its 11th January 1991 meeting and which<br />
makes available to <strong>the</strong> market 2.5 million barrels <strong>of</strong> oil per day,<br />
would remain in effect and that it would continue to be<br />
implemented flexibly in close consultation with <strong>the</strong> Executive<br />
Director [<strong>IEA</strong>/GB(91)3, Annex, paragraph (a)].<br />
<strong>The</strong> legally binding decisions <strong>of</strong> <strong>the</strong> Governing Board are fur<strong>the</strong>r discussed<br />
in Chapter V, Section A-16 below.<br />
3. O<strong>the</strong>r Actions <strong>of</strong> <strong>the</strong> Governing Board<br />
Under a number <strong>of</strong> grants <strong>of</strong> powers and responsibilities, <strong>the</strong> Governing<br />
Board is empowered to take a wide range <strong>of</strong> actions, binding as well as nonbinding<br />
actions, in <strong>the</strong> legal sense. <strong>The</strong>se are found in <strong>the</strong> specific mandates<br />
conferred upon <strong>the</strong> Governing Board in <strong>the</strong> I.E.P. Agreement and in <strong>the</strong><br />
broad scope <strong>of</strong> “action” stated in <strong>the</strong> Article 51 mandate. As noted in<br />
Chapter V, Section A-16 below, “action” is a subjective term which leaves to<br />
<strong>the</strong> Governing Board <strong>the</strong> decision as to <strong>the</strong> type <strong>of</strong> “action” it will adopt; it<br />
is not limited to <strong>the</strong> “decision” and “recommendation” actions referred to in<br />
Article 51.1. <strong>The</strong> form most <strong>of</strong>ten utilized by <strong>the</strong> Governing Board is <strong>the</strong><br />
adoption <strong>of</strong> “Conclusions”: <strong>the</strong> overall outcome <strong>of</strong> Governing Board<br />
meetings is recorded in documents entitled “Conclusions”, usually without<br />
clear distinctions among “decisions,” “findings,” “recommendations,”<br />
“declarations” and o<strong>the</strong>r actions. Sometimes <strong>the</strong> specific action is stated as<br />
a “Conclusion” (as in “<strong>the</strong> Governing Board concluded that . . .”). Hence,<br />
it has been necessary to examine <strong>the</strong> action in context to determine from <strong>the</strong><br />
language used whe<strong>the</strong>r <strong>the</strong> intent is to create a binding obligation in <strong>the</strong><br />
legal sense or to take a political commitment or o<strong>the</strong>r action. In fact <strong>the</strong><br />
Governing Board has at one time or ano<strong>the</strong>r used all <strong>of</strong> those action<br />
formulations, sometimes with <strong>the</strong> intent to create legal obligations, and<br />
sometimes with <strong>the</strong> intent to establish political commitments.<br />
Yet <strong>the</strong> ostensibly s<strong>of</strong>ter political commitments can sometimes be as<br />
far reaching as legal commitments or even more significant in terms <strong>of</strong> <strong>the</strong><br />
122
outcome. Political actions <strong>of</strong>ten have <strong>the</strong> advantage <strong>of</strong> being more<br />
acceptable than legal commitments, and Members find <strong>the</strong>y can at times<br />
proceed fur<strong>the</strong>r along a political path toward greater commitment than <strong>the</strong>y<br />
could with a legally binding commitment. Problems <strong>of</strong> a “least common<br />
denominator” level <strong>of</strong> agreement and <strong>the</strong> need to comply with constitutional<br />
requirements may be less far-reaching or avoidable for political ra<strong>the</strong>r than<br />
legal commitments. <strong>The</strong> rhetoric that can be used in political commitments<br />
may also be more effective in moving governments and populations toward<br />
mutually desired objectives than could be <strong>the</strong> case with legal obligations.<br />
Where <strong>the</strong> sanction <strong>of</strong> legal obligations is perceived as being mild or<br />
perhaps illusory in practice, some will find little advantage in expressing<br />
actions in legal form, especially if <strong>the</strong> price is a reduction in <strong>the</strong> scope or<br />
intensity <strong>of</strong> <strong>the</strong> action in question.<br />
4. Commitments Under O<strong>the</strong>r Agreements<br />
A few legal or operational obligations established before or after <strong>the</strong> creation<br />
<strong>of</strong> <strong>the</strong> <strong>IEA</strong> and taken by Agency Members in o<strong>the</strong>r agreements may also bear<br />
upon <strong>IEA</strong> relationships. <strong>The</strong>se include <strong>the</strong> OECD Convention generally and<br />
its Supplementary Protocol No. 1 concerning <strong>the</strong> Commission <strong>of</strong> <strong>the</strong><br />
European Communities (concluded before <strong>the</strong> <strong>IEA</strong> was established), and <strong>the</strong><br />
<strong>IEA</strong> Agreement with Norway, concluded afterwards. Separate commitments<br />
may also be seen in <strong>the</strong> authorizing process for <strong>IEA</strong> Implementing<br />
Agreements and <strong>the</strong> direct participation <strong>of</strong> Members as Contracting Parties<br />
in those Agreements. Members’ obligations under o<strong>the</strong>r agreements like <strong>the</strong><br />
United Nations Charter, <strong>the</strong> General Agreement on Tariffs and Trade<br />
(GATT) and <strong>the</strong> European Communities (European Union) Treaties can also<br />
have an indirect effect upon how <strong>IEA</strong> Members apply policies with respect to<br />
<strong>the</strong> <strong>IEA</strong>, but this is not <strong>the</strong> place to consider those subjects.<br />
<strong>The</strong> fact that all <strong>IEA</strong> Members are parties to <strong>the</strong> OECD Convention<br />
has implications for <strong>the</strong> <strong>IEA</strong> because <strong>of</strong> <strong>the</strong> broad economic scope <strong>of</strong> <strong>the</strong><br />
OECD Members’ obligations under <strong>the</strong> Convention and because all <strong>IEA</strong><br />
Members agreed to <strong>the</strong> OECD Council Decision bringing <strong>the</strong> <strong>IEA</strong> into <strong>the</strong><br />
OECD “as an autonomous body within <strong>the</strong> framework <strong>of</strong> <strong>the</strong> Organisation”<br />
[C(74)<strong>20</strong>3(Final), Article 1]. <strong>The</strong> applicable OECD Convention provisions<br />
include Article 1 (broad economic policy aims <strong>of</strong> <strong>the</strong> Organisation), Article<br />
2 (<strong>the</strong> economic policy obligations <strong>of</strong> Members) and Article 3 (commitments<br />
<strong>of</strong> Members on information, consultation, co-operation and co-ordinated<br />
action). A provision on <strong>the</strong> participation <strong>of</strong> <strong>the</strong> Commission <strong>of</strong> <strong>the</strong><br />
European Communities derives as well from <strong>the</strong> OECD Convention, and<br />
123
specifically from Supplementary Protocol No. 1 which provides that <strong>the</strong><br />
Commission “shall take part” in <strong>the</strong> work <strong>of</strong> <strong>the</strong> Organisation. Reference was<br />
made to that provision in <strong>the</strong> Agency’s letter inviting <strong>the</strong> Commission to take<br />
part in <strong>the</strong> work <strong>of</strong> <strong>the</strong> various bodies <strong>of</strong> <strong>the</strong> Agency [See Section D-3 below].<br />
In only one instance to date has <strong>the</strong> Agency entered into a formal<br />
international agreement, and that was <strong>the</strong> Agreement with Norway on <strong>the</strong><br />
participation <strong>of</strong> that country in <strong>the</strong> Agency [on this subject generally, see<br />
Section A-3 above]. <strong>The</strong> Agreement on Norway establishes special rules for<br />
Norway’s possible participation in <strong>the</strong> <strong>IEA</strong> Sharing System and contains a<br />
number <strong>of</strong> o<strong>the</strong>r commitments and rights <strong>of</strong> Norway and <strong>of</strong> <strong>the</strong> Agency.<br />
Norway enjoys <strong>the</strong> rights <strong>of</strong> Members in respect <strong>of</strong> Chapters V through VIII<br />
<strong>of</strong> <strong>the</strong> I.E.P. Agreement, i.e. on <strong>the</strong> subject <strong>of</strong> information, oil company<br />
consultation, long-term co-operation and relations with producer and o<strong>the</strong>r<br />
consumer countries [Article 3], and <strong>the</strong> Agency has <strong>the</strong> corresponding<br />
obligations. <strong>The</strong> Agency is also required to invite Norway to participate in<br />
<strong>the</strong> work <strong>of</strong> <strong>the</strong> Governing Board and its subordinate organs and to<br />
determine in agreement with Norway appropriate institutional provisions<br />
for <strong>the</strong> implementation <strong>of</strong> <strong>the</strong> Agreement. All <strong>of</strong> those provisions, while<br />
nominally taken as commitments <strong>of</strong> <strong>the</strong> Agency, represent as well from an<br />
operational standpoint obligations which must be respected by <strong>the</strong> Members<br />
<strong>of</strong> <strong>the</strong> Agency.<br />
Finally, <strong>the</strong>re are operational obligations <strong>of</strong> Members derived from <strong>the</strong><br />
process <strong>of</strong> authorizing <strong>IEA</strong> energy R & D Implementing Agreements and<br />
<strong>the</strong>re are legal commitments for Members which participate as Contracting<br />
Parties in those Agreements. <strong>The</strong> Governing Board authorizes each<br />
Implementing Agreement by approval <strong>of</strong> <strong>the</strong> “Explanatory Note” submitted<br />
to it by <strong>the</strong> Secretariat for approval. Those approval decisions in <strong>the</strong> context<br />
<strong>of</strong> <strong>the</strong> Guiding Principles for R & D [Annex II to <strong>the</strong> Long-Term Programme]<br />
do not contain commitments to participate in particular Implementing<br />
Agreements or to finance or o<strong>the</strong>rwise directly support <strong>the</strong> particular<br />
projects, but <strong>the</strong>y do carry <strong>the</strong> commitment to provide general support in <strong>the</strong><br />
Member’s country (for example in <strong>the</strong> selection <strong>of</strong> participants) and<br />
indirectly through <strong>the</strong> Agency in <strong>the</strong> development, negotiation and operation<br />
<strong>of</strong> <strong>the</strong> projects, including <strong>the</strong> support <strong>of</strong> <strong>the</strong> <strong>IEA</strong> R & D and Legal Offices,<br />
participation in <strong>the</strong> <strong>IEA</strong> review process and so forth.<br />
Moreover, in many <strong>of</strong> those projects Members participate directly in<br />
<strong>the</strong> name <strong>of</strong> <strong>the</strong> government, <strong>the</strong> responsible ministry or o<strong>the</strong>r governmental<br />
agencies. Under <strong>the</strong> Implementing Agreements in those cases, governments<br />
are directly obligated to participate in <strong>the</strong> project in accordance with <strong>the</strong><br />
applicable terms, which <strong>of</strong>ten entails research and development, infor-<br />
124
mation exchange and financing commitments, not to <strong>the</strong> Agency or its<br />
Members, but to <strong>the</strong> o<strong>the</strong>r participants in <strong>the</strong> Implementing Agreement.<br />
5. Flexibility and Waiver <strong>of</strong> Rights Under <strong>the</strong> I.E.P.<br />
Agreement<br />
It is a frequent and understandable assumption that “rules are rules” or<br />
that institutional legal commitments are taken to ensure a high level or 100<br />
per cent compliance. That is usually <strong>the</strong> outcome. Yet experience in <strong>the</strong><br />
formulation <strong>of</strong> rules and <strong>the</strong>ir application, sometimes in unforeseen<br />
circumstances, leads to <strong>the</strong> conclusion that, rigid as rules do at times<br />
appear, <strong>the</strong>re are acceptable ways <strong>of</strong> making <strong>the</strong>m adapt effectively to an<br />
ever changing reality. Indeed, that has been <strong>the</strong> Governing Board’s<br />
fundamental approach since <strong>the</strong> Agency was first established. <strong>The</strong> Board<br />
might be expected to approach such questions pragmatically, with less<br />
interest in conserving abstract textual purity than in finding solutions to<br />
textual problems in a workable and mutually acceptable way.<br />
This can be done through a number <strong>of</strong> instrumentalities, such as by<br />
amendment <strong>of</strong> <strong>the</strong> I.E.P. Agreement [See Chapter III, Section K above] or<br />
by interpretation [See Chapter III, Section M] when <strong>the</strong> conditions for those<br />
procedures are present. In <strong>the</strong> case <strong>of</strong> <strong>the</strong> I.E.P. Agreement, <strong>the</strong>re are two<br />
o<strong>the</strong>r available procedures: (1) use <strong>of</strong> <strong>the</strong> flexibility built into <strong>the</strong><br />
Agreement, and (2) <strong>the</strong> waiver <strong>of</strong> rights under general international law,<br />
when <strong>the</strong> conditions for those procedures are present.<br />
Flexibility is introduced formally in <strong>the</strong> general scope <strong>of</strong> Articles 51<br />
and in <strong>the</strong> limited area <strong>of</strong> oil emergency measures by Article 22 <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement which confer far-reaching powers on <strong>the</strong> Governing Board:<br />
Article 51.2<br />
<strong>The</strong> Governing Board shall review periodically and take<br />
appropriate action concerning developments in <strong>the</strong> international<br />
energy situation, including problems relating to <strong>the</strong> oil<br />
supplies <strong>of</strong> any Participating Country or Countries, and <strong>the</strong><br />
economic and monetary implications <strong>of</strong> <strong>the</strong>se developments.<br />
Article 22<br />
<strong>The</strong> Governing Board may at any time decide by unanimity to<br />
activate any appropriate emergency measures not provided for<br />
in this Agreement, if <strong>the</strong> situation so requires.<br />
125
<strong>The</strong>se are quite broad and flexible grants <strong>of</strong> power made necessary by <strong>the</strong><br />
difficulty <strong>of</strong> amending <strong>the</strong> Agreement formally in an emergency or indeed at<br />
any o<strong>the</strong>r time. It took fourteen months for <strong>the</strong> Agreement initially to enter<br />
into force in January 1976 [See Chapter III, Section G], and to obtain<br />
formal amendments rapidly enough to be effective in an emergency would<br />
seem most difficult or impossible. But <strong>the</strong> two quoted provisions were<br />
designed to permit <strong>the</strong> <strong>IEA</strong> to respond effectively and rapidly under<br />
changing circumstances ei<strong>the</strong>r in an oil supply emergency or o<strong>the</strong>rwise,<br />
without <strong>the</strong> need to await <strong>the</strong> lengthy process <strong>of</strong> amendment. An important<br />
example <strong>of</strong> <strong>the</strong> Governing Board’s rapid and flexible response capability is<br />
found in <strong>the</strong> Decision on Stocks and Supply Disruptions adopted in 1984<br />
[<strong>IEA</strong>/GB(84)27, Item 2(a)(ii) and Annex I].<br />
In addition to <strong>the</strong>se textual provisions, <strong>the</strong>re is <strong>the</strong> possibility under<br />
general legal practice for Members to agree by consensus not to object in<br />
appropriate cases to special arrangements in application <strong>of</strong> <strong>the</strong> spirit or <strong>the</strong><br />
letter <strong>of</strong> <strong>the</strong> Agreement, or to waive <strong>the</strong>ir rights to insist on strict compliance<br />
with it. This process can be characterized as “acquiescence” (express or<br />
tacit), “waiver”, or “interpretation”, but whatever it might be called (and<br />
<strong>the</strong> Governing Board has yet to characterize it), <strong>the</strong> Board has found that<br />
this process for flexibility serves a useful purpose. For example, when all<br />
<strong>IEA</strong> Members agree in practice not to object to <strong>the</strong> absence <strong>of</strong> a required<br />
action, tacit or explicit waiver <strong>of</strong> rights under <strong>the</strong> I.E.P. Agreement is a<br />
legally proper procedure. Over <strong>the</strong> years waivers have been tacitly or<br />
explicitly agreed many times in <strong>the</strong> Governing Board. Some examples <strong>of</strong><br />
waiver or acquiescence in important sectors follow:<br />
(a) Stocks.<br />
■ Austria and Turkey. Those Members were allowed several years <strong>of</strong><br />
acquiescence in <strong>the</strong>ir non-performance <strong>of</strong> <strong>the</strong> emergency reserve<br />
commitment, from <strong>the</strong> outset on 18 November <strong>1974</strong> [<strong>IEA</strong>/GB(74)9<br />
(1st Revision), Item 4(b) and (c)(1)].<br />
■ 1980 Ministerial Decision. <strong>IEA</strong> Ministers agreed that governments<br />
would, in a equitable manner, take measures which included<br />
provision that “Reduction in stocks below <strong>the</strong> I.E.P. 90-day<br />
emergency level might be considered in countries with particular<br />
difficulties” [9 December 1980, <strong>IEA</strong>/GB(80)97, Item 2(f) and (g)(i)].<br />
■ Arrangement for Iceland. <strong>The</strong> Governing Board agreed to an<br />
arrangement for <strong>the</strong> membership <strong>of</strong> Iceland (which in <strong>the</strong> end did not<br />
materialize). Under that arrangement, however, Iceland would have<br />
126
■<br />
requested a five year period <strong>of</strong> adjustment to increase oil reserves<br />
gradually under favorable conditions, and <strong>the</strong> Board expressed <strong>the</strong><br />
view that it would see no difficulties in noting that statement without<br />
contradiction in connection with Iceland’s possible accession [<strong>20</strong>-21<br />
April 1982, <strong>IEA</strong>/GB(82)44, Item 6(b) and Annex II].<br />
Stocks Elements Deadlines. <strong>The</strong> deadline for fixing <strong>the</strong> extent to<br />
which <strong>the</strong> elements in I.E.P. Article 3.1 (stocks, fuel switching and<br />
standby production) may satisfy <strong>the</strong> emergency reserve commitment<br />
has been waived by acquiescence from 1975.<br />
(b) Base Period Final Consumption (BPFC), an Element <strong>of</strong><br />
Calculation in <strong>the</strong> Emergency Sharing System.<br />
■ Calculation Period. <strong>The</strong> change in BPFC from <strong>the</strong> last four<br />
quarters with a delay <strong>of</strong> one quarter (Article 18.1) to <strong>the</strong> most recent<br />
four quarters was made possible after tacit waiver <strong>of</strong> <strong>the</strong> deadline set<br />
in Article 18.2 (providing for such action by 1 July 1975). <strong>The</strong> new<br />
calculation would be made and applied pursuant to Article 22 [13-14<br />
March 1980, see <strong>IEA</strong>/GB(80)21, Item 10; EMM, 4th Ed. 1982, p. 14].<br />
■ Sweden. Change in <strong>the</strong> BPFC rule for Sweden was made by waiver<br />
to take account <strong>of</strong> special supply problems <strong>of</strong> Sweden in <strong>the</strong> winter<br />
time [30 March 1979, see <strong>IEA</strong>/GB(79)14, Item 2(h); EMM, p.14].<br />
(c)<br />
Selective Trigger.<br />
“Selective trigger” situations arise when any Member (and not necessarily<br />
<strong>the</strong> Member group as a whole) sustains an oil supply reduction sufficient to<br />
activate <strong>the</strong> Emergency Sharing System. In a number <strong>of</strong> those situations (particularly<br />
in 1979-1981), <strong>the</strong> trigger finding was not made, and <strong>the</strong> Sharing System<br />
was not activated; activation can be treated as having been waived by <strong>the</strong><br />
countries concerned for failure to object or to seek Board action under Article 21.<br />
(d) Waiver <strong>of</strong> Time Limits.<br />
A number <strong>of</strong> deadlines in <strong>the</strong> I.E.P. Agreement have been waived (or<br />
treated as being indicative only), in particular <strong>the</strong> important time limit <strong>of</strong><br />
1 July 1975 for adopting <strong>the</strong> Long-Term Programme (later adopted in<br />
1976); o<strong>the</strong>r deadlines have also been waived, including those contained in<br />
Articles 3.2 (stocks), 18.2 (BPFC) mentioned above, and various provisions<br />
<strong>of</strong> <strong>the</strong> Annex to <strong>the</strong> I.E.P. Agreement.<br />
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(e)<br />
Rules <strong>of</strong> Procedure.<br />
Article 50.2 requires rules <strong>of</strong> procedure, but such rules have not been<br />
adopted on a systematic basis to <strong>the</strong> present day. Hence <strong>the</strong> right to have<br />
such rules in <strong>the</strong> usual form has been waived [See Chapter V, Section A-8<br />
below].<br />
(f)<br />
Management Committee Meetings.<br />
Article 53 and o<strong>the</strong>r Articles provide for Management Committee<br />
meetings, but separate meetings <strong>of</strong> <strong>the</strong> Management Committee have been<br />
waived from <strong>the</strong> outset <strong>of</strong> <strong>the</strong> Agency by decision <strong>of</strong> <strong>the</strong> Governing Board to<br />
have its meetings deemed to be joint meetings <strong>of</strong> <strong>the</strong> Governing Board and <strong>the</strong><br />
Management Committee [See Chapter V, Section A-<strong>20</strong> below]. This resulted<br />
from <strong>the</strong> presence in <strong>the</strong> Governing Board <strong>of</strong> <strong>the</strong> high level representation<br />
from capitals, initially foreseen for <strong>the</strong> Management Committee.<br />
(g)<br />
Standing Group on Producer and Consumer Relations.<br />
This Group, by acquiescence, has not met for a number <strong>of</strong> years,<br />
despite Article 58.1 and o<strong>the</strong>r provisions; by Governing Board acquiescence<br />
<strong>the</strong> Committee on Non-Member Countries has replaced it in practice.<br />
(h) Decisions Concerning <strong>the</strong> Secretariat.<br />
Article 59.4 requires <strong>the</strong> Governing Board to take “all decisions<br />
necessary for <strong>the</strong> establishment and <strong>the</strong> functioning <strong>of</strong> <strong>the</strong> Secretariat”, but<br />
this rule has been waived. Many <strong>of</strong> those decisions at <strong>the</strong> administrative<br />
level are taken in practice by <strong>the</strong> OECD in place <strong>of</strong> <strong>the</strong> Governing Board.<br />
(i)<br />
■<br />
■<br />
Voting.<br />
Despite <strong>the</strong> voting requirements <strong>of</strong> Article 61, <strong>the</strong> Governing Board<br />
almost always acts by consensus, not by formal vote. <strong>The</strong> formal<br />
voting rules are waived by that procedure.<br />
Article 62.6 requires <strong>the</strong> Governing Board to review annually <strong>the</strong><br />
number and distribution <strong>of</strong> voting weights. By waiver and<br />
acquiescence <strong>the</strong>re has never been a review or a change in voting<br />
weights since <strong>the</strong>y were established in <strong>1974</strong> (except as necessary to<br />
accommodate new Members).<br />
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(j)<br />
Financial Contributions.<br />
Article 64.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement required <strong>the</strong> Governing Board to<br />
review <strong>the</strong> scale <strong>of</strong> contributions after one year. Rights <strong>of</strong> Members to have<br />
this review have been waived; <strong>the</strong> <strong>IEA</strong> has never conducted such a review.<br />
(k)<br />
General Review <strong>of</strong> <strong>the</strong> I.E.P. Agreement.<br />
A general review after 1980 is required by Article 74, although no<br />
such review has been held, and <strong>the</strong> corresponding rights under this Article<br />
have been waived in practice up to <strong>the</strong> present date.<br />
Thus, it may be concluded that under established Governing Board<br />
practice, <strong>the</strong> Agency retains at its disposal adequate means to apply, adapt,<br />
s<strong>of</strong>ten or avoid unwieldy or rigid rules under <strong>the</strong> I.E.P. Agreement when<br />
that flexibility is necessary in order to realize <strong>the</strong> purposes <strong>of</strong> <strong>the</strong> Agency<br />
and <strong>the</strong> outcome is supported by a consensus <strong>of</strong> <strong>the</strong> Members.<br />
This being said, <strong>the</strong> Members’ obligations remain a vital element <strong>of</strong><br />
<strong>the</strong> I.E.P. Agreement, in part because <strong>the</strong>y are essential to <strong>the</strong> Emergency<br />
Sharing System, but also because <strong>the</strong>y form <strong>the</strong> operational basis for <strong>the</strong><br />
o<strong>the</strong>r energy policy and institutional provisions <strong>of</strong> <strong>the</strong> Agreement. <strong>The</strong><br />
relations <strong>the</strong>se obligations create among <strong>the</strong> Members, and between<br />
Members and <strong>the</strong> Agency itself, are indispensable to <strong>the</strong> realization <strong>of</strong> <strong>the</strong><br />
objectives <strong>of</strong> <strong>the</strong> Agency’s founders.<br />
C. <strong>The</strong> <strong>IEA</strong> as an Autonomous Agency <strong>of</strong><br />
<strong>the</strong> OECD<br />
1. <strong>The</strong> <strong>IEA</strong>-OECD Legal Relationship in General<br />
A wholly different and additional set <strong>of</strong> <strong>IEA</strong> relationships has been<br />
established in order to provide <strong>the</strong> <strong>IEA</strong> with an institutional “home” and <strong>the</strong><br />
necessary logistical support for it to carry out its functions. This has been<br />
realized in <strong>the</strong> relationship <strong>of</strong> <strong>the</strong> <strong>IEA</strong> to <strong>the</strong> OECD, in which <strong>the</strong> Agency<br />
retains its full autonomy, and in which each contributes to, and benefits<br />
from, <strong>the</strong> o<strong>the</strong>r.<br />
<strong>The</strong> OECD’s association with <strong>the</strong> <strong>IEA</strong> began well before <strong>the</strong> actual<br />
establishment <strong>of</strong> <strong>the</strong> Agency. It began with strong OECD representation at<br />
129
<strong>the</strong> Washington Energy Conference and at <strong>the</strong> Energy Co-ordinating Group<br />
(ECG) negotiations on <strong>the</strong> I.E.P. Agreement in <strong>1974</strong>, where OECD<br />
representatives made significant contributions to <strong>the</strong> <strong>IEA</strong> concept and to <strong>the</strong><br />
structure and formal terms <strong>of</strong> <strong>the</strong> instruments establishing <strong>the</strong> Agency.<br />
Co-operation between <strong>the</strong> two organizations commenced immediately<br />
upon <strong>the</strong> establishment <strong>of</strong> <strong>the</strong> Agency. <strong>The</strong> contributions <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s staff<br />
made it possible to expand <strong>the</strong> OECD’s work on <strong>the</strong> initial long-term energy<br />
assessment (published by <strong>the</strong> OECD under <strong>the</strong> title Energy Prospects to<br />
1985), on energy statistics, economic analysis and environment work, while<br />
<strong>the</strong> <strong>IEA</strong> programme in those sectors was enriched by contributions from <strong>the</strong><br />
OECD. Moreover, <strong>the</strong> OECD assisted from <strong>the</strong> beginning in providing<br />
sophisticated and effective logistical support in accordance with<br />
arrangements between <strong>the</strong> two organizations.<br />
<strong>The</strong> institutional relationship between <strong>the</strong> <strong>IEA</strong> and <strong>the</strong> OECD is<br />
governed by <strong>the</strong> I.E.P. Agreement, by <strong>the</strong> Council Decision on <strong>the</strong><br />
Establishment <strong>of</strong> <strong>the</strong> Agency and by <strong>the</strong> decisions <strong>of</strong> <strong>the</strong> Governing Board<br />
and <strong>of</strong> <strong>the</strong> Council. Broadly stated, <strong>the</strong> I.E.P. Agreement governs <strong>the</strong> <strong>IEA</strong><br />
Members’ obligations and <strong>the</strong> substantive work <strong>of</strong> <strong>the</strong> Agency in <strong>the</strong> energy<br />
field as well as <strong>the</strong> structure and operational rules <strong>of</strong> <strong>the</strong> Agency, while <strong>the</strong><br />
Council Decision is concerned with <strong>the</strong> internal relations between <strong>the</strong><br />
Agency and <strong>the</strong> OECD and related procedures. <strong>The</strong> terms <strong>of</strong> <strong>the</strong><br />
Agreement and <strong>the</strong> implementing actions <strong>of</strong> <strong>the</strong> Governing Board provide<br />
<strong>the</strong> final and overriding authority for Agency powers and responsibilities.<br />
<strong>The</strong> I.E.P Agreement, essentially <strong>the</strong> founding document <strong>of</strong> <strong>the</strong> Agency,<br />
stands quite independently as a treaty under international law, without<br />
depending upon <strong>the</strong> Agency’s relationship with <strong>the</strong> OECD in so far as its<br />
legal effect is concerned. Had <strong>the</strong> OECD not succeeded in arranging for<br />
<strong>the</strong> Agency to be lodged in that Organisation, <strong>the</strong> Agreement would have<br />
been sufficient to establish <strong>the</strong> Agency under international law, and that<br />
indeed was foreseen in <strong>the</strong> Brussels Energy Co-ordinating Group<br />
negotiations before it was clear that <strong>the</strong> OECD could take <strong>the</strong> decisions<br />
necessary to lodge <strong>the</strong> Agency in that Organisation. In <strong>the</strong> negotiation<br />
stage, moreover, <strong>the</strong> autonomous status <strong>of</strong> <strong>the</strong> <strong>IEA</strong> in <strong>the</strong> OECD was an<br />
<strong>of</strong>ten stated objective.<br />
<strong>The</strong> importance <strong>of</strong> <strong>the</strong> I.E.P. Agreement in achieving <strong>the</strong> objective <strong>of</strong><br />
autonomy derives not only from <strong>the</strong> formal legal independence <strong>of</strong> <strong>the</strong><br />
Agency, but also from <strong>the</strong> completeness <strong>of</strong> <strong>the</strong> Agreement in defining <strong>the</strong><br />
elements <strong>of</strong> <strong>the</strong> Agency and <strong>the</strong> details <strong>of</strong> <strong>the</strong> Program it established. As<br />
will be seen throughout this work, <strong>the</strong> Program is fully defined in <strong>the</strong> I.E.P.<br />
Agreement which provides, moreover, <strong>the</strong> exclusive mechanism for <strong>the</strong><br />
130
fur<strong>the</strong>r development, adaptation and modification <strong>of</strong> <strong>the</strong> Program. <strong>The</strong><br />
Agreement contains numerous provisions which are totally at variance with<br />
<strong>the</strong> corresponding OECD rules which could not be applied to <strong>the</strong> Agency if<br />
it were to realize its objectives. <strong>The</strong>re is no hint <strong>of</strong> legal or operational<br />
dependence <strong>of</strong> <strong>the</strong> Agency on <strong>the</strong> OECD for any <strong>of</strong> <strong>the</strong>se important<br />
elements. Nor does <strong>the</strong> I.E.P. Agreement define or even suggest <strong>the</strong><br />
relationships between <strong>the</strong> two organizations beyond <strong>the</strong> statement <strong>of</strong><br />
intention that <strong>the</strong> organs <strong>of</strong> <strong>the</strong> <strong>IEA</strong> be created within <strong>the</strong> framework <strong>of</strong> <strong>the</strong><br />
OECD and that o<strong>the</strong>r Members <strong>of</strong> <strong>the</strong> OECD may desire to join <strong>the</strong> Agency<br />
[See <strong>the</strong> Preamble], and beyond brief references to <strong>the</strong> OECD principles<br />
and rules about scales <strong>of</strong> contributions [Article 64.1] and to <strong>the</strong><br />
requirement <strong>of</strong> OECD membership for accession to <strong>the</strong> I.E.P. Agreement<br />
[Article 71.1]. <strong>The</strong>re is no o<strong>the</strong>r reference to <strong>the</strong> OECD in relation to <strong>the</strong><br />
<strong>IEA</strong>’s programme, external relations, budgets, personnel, operations,<br />
procedures or o<strong>the</strong>r questions.<br />
When <strong>the</strong> Council Decision on lodging <strong>the</strong> Agency in <strong>the</strong> OECD was<br />
adopted, <strong>the</strong> I.E.P. Agreement had been fully negotiated but not yet signed.<br />
<strong>The</strong> two-step procedure calling for adoption first <strong>of</strong> <strong>the</strong> OECD Council<br />
Decision and <strong>the</strong>n <strong>the</strong> signature <strong>of</strong> <strong>the</strong> I.E.P. Agreement was a practical<br />
measure reflecting <strong>the</strong> fact that <strong>the</strong> Agreement as negotiated might need<br />
modification, for example in <strong>the</strong> preambular paragraph cited above, if <strong>the</strong><br />
OECD Council were unable to act. <strong>The</strong>re could be o<strong>the</strong>r anomalies as well,<br />
such as <strong>the</strong> provisions in Article 64.1 on use <strong>of</strong> <strong>the</strong> OECD principles and<br />
rules for <strong>the</strong> scale <strong>of</strong> contributions and in Article 71 for accession to <strong>the</strong><br />
Agreement by OECD Members. Because <strong>of</strong> <strong>the</strong> OECD rule <strong>of</strong> unanimity<br />
and <strong>the</strong> assumption that certain OECD Members would not be able to<br />
participate at <strong>the</strong> outset, it could not be known with certainty in advance <strong>of</strong><br />
that Decision whe<strong>the</strong>r <strong>the</strong> Decision could be taken at all, and if so, what its<br />
precise terms would be. As it turned out, <strong>the</strong> Decision was adopted without<br />
substantial amendment in <strong>the</strong> form in which it had been negotiated among<br />
<strong>the</strong> Agency Participating Countries at <strong>the</strong> ECG meetings in Brussels [See<br />
Chapter II, Section C-5 above].<br />
In <strong>the</strong> end <strong>the</strong>re was no difficulty in making <strong>the</strong> final arrangements<br />
for <strong>the</strong> establishment <strong>of</strong> <strong>the</strong> Agency within <strong>the</strong> OECD. Both <strong>the</strong> OECD<br />
Council Decision and <strong>the</strong> I.E.P. Agreement called for some adjustment <strong>of</strong><br />
expectations by <strong>the</strong> Organisation and by <strong>the</strong> Agency countries. <strong>The</strong><br />
practical arrangements for <strong>the</strong> limited integration <strong>of</strong> <strong>the</strong> two institutions,<br />
carried out in a spirit <strong>of</strong> mutual co-operation, have made possible <strong>the</strong><br />
development <strong>of</strong> a harmonious relationship which has proved to be<br />
advantageous both to <strong>the</strong> Agency and <strong>the</strong> OECD country groups.<br />
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<strong>The</strong> formal relationship between <strong>the</strong> two organizations is expressed<br />
succinctly in Article 1 <strong>of</strong> <strong>the</strong> Council Decision as follows:<br />
An International Energy Agency . . . is hereby established as an<br />
autonomous body within <strong>the</strong> framework <strong>of</strong> <strong>the</strong> Organisation<br />
[Emphasis added].<br />
This meant that for some purposes <strong>the</strong> Agency would be considered a part<br />
<strong>of</strong> <strong>the</strong> OECD, able to avail itself <strong>of</strong> <strong>the</strong> legal personality <strong>of</strong> <strong>the</strong> OECD and<br />
o<strong>the</strong>r OECD arrangements when required, although <strong>the</strong> Agency would<br />
retain under <strong>the</strong> I.E.P. Agreement a measure <strong>of</strong> independent legal<br />
personality in international law to be employed as <strong>the</strong> Governing Board<br />
might direct. At <strong>the</strong> same time <strong>the</strong> <strong>IEA</strong> could make use <strong>of</strong> OECD services,<br />
and <strong>the</strong> OECD could similarly call upon <strong>the</strong> <strong>IEA</strong> in accordance with <strong>the</strong><br />
terms <strong>of</strong> <strong>the</strong> Council Decision and upon <strong>the</strong> decision <strong>of</strong> <strong>the</strong> OECD Council<br />
and <strong>the</strong> <strong>IEA</strong> Governing Board. On programme matters, <strong>the</strong> <strong>IEA</strong> is fully<br />
autonomous, as will be seen below.<br />
For <strong>the</strong> most part <strong>the</strong> relations between <strong>the</strong> two organizations have<br />
been harmonious. <strong>The</strong> legislative arrangements described in this Chapter<br />
clearly give priority to <strong>IEA</strong> autonomy. When <strong>the</strong> rules are quite specific,<br />
<strong>the</strong>re has been little difficulty. When <strong>the</strong>y are more general, as for <strong>the</strong><br />
financial and personnel sectors, problems have arisen and might arise again.<br />
<strong>The</strong>re is continuing need for understanding and co-operation on both sides<br />
<strong>of</strong> this equation in order to avoid possible confrontations <strong>of</strong> executive heads<br />
or legislative bodies <strong>of</strong> <strong>the</strong> two organizations, confrontations which both<br />
sides have been able to avoid during <strong>the</strong> period covered by this history <strong>of</strong><br />
<strong>the</strong> <strong>IEA</strong>.<br />
2. Programme Autonomy <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
<strong>The</strong> programme autonomy <strong>of</strong> <strong>the</strong> Agency is assured by legal and institutional<br />
provisions concerning <strong>the</strong> Governing Board. <strong>The</strong> I.E.P. Agreement<br />
gives full power over <strong>the</strong> programme to <strong>the</strong> Governing Board, subject only<br />
to <strong>the</strong> provisions <strong>of</strong> <strong>the</strong> Agreement itself. Moreover, Article 4 <strong>of</strong> <strong>the</strong> Council<br />
Decision provides, in terms parallel to <strong>the</strong> OECD Council’s own powers<br />
under <strong>the</strong> OECD Convention, that <strong>the</strong> Governing Board<br />
composed <strong>of</strong> all <strong>the</strong> Participating Countries <strong>of</strong> <strong>the</strong> Agency shall<br />
be <strong>the</strong> body from which all acts <strong>of</strong> <strong>the</strong> Agency derive, and shall<br />
have <strong>the</strong> power to make recommendations and to take decisions<br />
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which shall, except as o<strong>the</strong>rwise provided, be binding upon<br />
Participating Countries, and to delegate its powers to o<strong>the</strong>r<br />
organs <strong>of</strong> <strong>the</strong> Agency. <strong>The</strong> Governing Board shall adopt its own<br />
rules <strong>of</strong> procedure and voting rules [Emphasis added].<br />
Article 4 thus contains <strong>the</strong> OECD Council’s recognition <strong>of</strong> <strong>the</strong> power <strong>of</strong> <strong>the</strong><br />
<strong>IEA</strong> Governing Board to make binding decisions. More specifically, Article<br />
6(a) provides that “<strong>The</strong> Governing Board shall decide upon and carry out<br />
an International Energy Program for co-operation in <strong>the</strong> field <strong>of</strong> energy . . .”<br />
for specified aims and “. . . may adopt o<strong>the</strong>r measures <strong>of</strong> co-operation in<br />
<strong>the</strong> energy field which it may deem necessary and o<strong>the</strong>rwise amend <strong>the</strong><br />
Program by unanimity, taking into account <strong>the</strong> constitutional procedures <strong>of</strong><br />
<strong>the</strong> Participating Countries”. Indeed, on 18 November <strong>1974</strong>, <strong>the</strong> Governing<br />
Board adopted <strong>the</strong> “Decision on an International Energy Program” which<br />
adopted <strong>the</strong> entire Program as internal <strong>IEA</strong> legislation and thus established<br />
within <strong>the</strong> Agency all <strong>the</strong> provisions <strong>of</strong> <strong>the</strong> Agreement concerning <strong>the</strong><br />
Agency’s powers and autonomy [See Chapter II, Section C-7 above].<br />
<strong>The</strong> recognition <strong>of</strong> <strong>the</strong> Agency’s powers within <strong>the</strong> energy field is a<br />
complete one in <strong>the</strong> sense that it coincides with <strong>the</strong> Council’s own powers in<br />
that field. That recognition extends to procedural matters as well. Since<br />
<strong>the</strong> OECD Rules <strong>of</strong> Procedure contain references to unanimous voting and<br />
o<strong>the</strong>r provisions which would be inconsistent with <strong>the</strong> I.E.P. Agreement,<br />
<strong>the</strong>re was recognition in Article 4 <strong>of</strong> <strong>the</strong> Council Decision that <strong>the</strong><br />
Governing Board could adopt its own rules <strong>of</strong> procedure and voting rules, a<br />
fur<strong>the</strong>r measure to ensure <strong>the</strong> autonomy <strong>of</strong> <strong>the</strong> Agency. Possible later action<br />
by <strong>the</strong> OECD Council, such as decisions conferring additional<br />
responsibilities on <strong>the</strong> Agency, might impinge on <strong>the</strong> Agency’s autonomy.<br />
However, such decisions can be made only upon <strong>the</strong> proposal <strong>of</strong> <strong>the</strong> Agency<br />
[Council Decision, Article 6(b)]. Nor could <strong>the</strong> Council amend that Article<br />
or any o<strong>the</strong>r provision <strong>of</strong> <strong>the</strong> Council Decision protecting <strong>the</strong> autonomy <strong>of</strong><br />
<strong>the</strong> Agency without <strong>the</strong> consent <strong>of</strong> <strong>the</strong> Agency’s Member countries, because<br />
as a practical matter <strong>the</strong> twenty-three <strong>IEA</strong> countries in <strong>the</strong> twenty-four<br />
Member Council could block <strong>the</strong> decision in that body under its rule <strong>of</strong><br />
unanimity. Thus <strong>the</strong> Program autonomy <strong>of</strong> <strong>the</strong> <strong>IEA</strong> is assured by practical<br />
as well as legal provisions.<br />
<strong>The</strong>re is no provision ei<strong>the</strong>r in <strong>the</strong> OECD Council Decision or in <strong>the</strong><br />
I.E.P. Agreement for <strong>the</strong> <strong>IEA</strong> Programmes <strong>of</strong> Work to be controlled by, or<br />
subject to co-ordination under <strong>the</strong> authority <strong>of</strong> <strong>the</strong> Council or any o<strong>the</strong>r<br />
body outside <strong>of</strong> <strong>the</strong> <strong>IEA</strong>. Once adopted by <strong>the</strong> Governing Board, <strong>the</strong> <strong>IEA</strong><br />
Programmes <strong>of</strong> Work are transmitted to <strong>the</strong> Council for information only;<br />
133
<strong>the</strong>y are not adopted by <strong>the</strong> Council. In <strong>the</strong> execution <strong>of</strong> its Programmes <strong>of</strong><br />
Work <strong>the</strong> <strong>IEA</strong> also enjoys full autonomy. <strong>The</strong>re are no provisions in <strong>the</strong><br />
I.E.P. Agreement which make any Program elements or operational<br />
instrumentality subject to OECD control or influence. For example, <strong>the</strong> <strong>IEA</strong><br />
enjoys full autonomy in matters <strong>of</strong> external relations [See Section D below].<br />
Nei<strong>the</strong>r <strong>the</strong> I.E.P. Agreement nor <strong>the</strong> Council Decision links in any way <strong>the</strong><br />
Agency’s decisions on external relations to those <strong>of</strong> <strong>the</strong> OECD. From <strong>the</strong><br />
outset, <strong>the</strong> Agency could not have carried out its functions as respects non-<br />
Members if its full autonomy in this and o<strong>the</strong>r sectors had not been firmly<br />
assured.<br />
However, <strong>the</strong>re is provision in Article 8 <strong>of</strong> <strong>the</strong> Council Decision for <strong>the</strong><br />
Governing Board to report annually to <strong>the</strong> Council on <strong>the</strong> activities <strong>of</strong> <strong>the</strong><br />
Agency and to submit o<strong>the</strong>r communications to <strong>the</strong> OECD Council upon its<br />
request or upon <strong>the</strong> initiative <strong>of</strong> <strong>the</strong> Board. <strong>The</strong> mission <strong>of</strong> <strong>the</strong> annual<br />
reports is solely to transmit information. In practice <strong>the</strong> annual reports are<br />
prepared in <strong>the</strong> <strong>IEA</strong> Secretariat (formerly by <strong>the</strong> Office <strong>of</strong> Legal Counsel;<br />
more recently by <strong>the</strong> Public Affairs Office). <strong>The</strong> reports are submitted for<br />
<strong>the</strong> Governing Board’s approval before <strong>the</strong>y are submitted to <strong>the</strong> Council.<br />
<strong>The</strong>re has seldom been any substantial comment on <strong>the</strong> report. In <strong>the</strong><br />
Council <strong>the</strong> report is introduced by <strong>the</strong> <strong>IEA</strong> Executive Director or o<strong>the</strong>r<br />
senior <strong>of</strong>ficial <strong>of</strong> <strong>the</strong> Agency who <strong>the</strong>n responds to any questions about <strong>the</strong><br />
work <strong>of</strong> <strong>the</strong> Agency during <strong>the</strong> period under review.<br />
Information has also been exchanged from <strong>the</strong> early days <strong>of</strong> <strong>the</strong><br />
Agency to 1990 at meetings <strong>of</strong> <strong>the</strong> OECD’s Committee for Energy Policy,<br />
when <strong>the</strong> <strong>IEA</strong> usually made reports on <strong>the</strong> activities <strong>of</strong> <strong>the</strong> Agency. Since<br />
<strong>the</strong> early 1990s this Committee has not met because <strong>of</strong> <strong>IEA</strong> membership<br />
changes, and at this juncture it seems unlikely that <strong>the</strong>re will be fur<strong>the</strong>r<br />
need for that Committee to meet again. Its mandate is expected to be<br />
reviewed in <strong>the</strong> course <strong>of</strong> 1995. In any event, nei<strong>the</strong>r <strong>the</strong> Council nor <strong>the</strong><br />
Committee has ever received a mandate to co-ordinate or govern <strong>IEA</strong> work.<br />
<strong>The</strong>ir operational functions have been limited in effect to liaison. Article 63<br />
<strong>of</strong> <strong>the</strong> I.E.P. Agreement envisages <strong>the</strong> possibility <strong>of</strong> establishing appropriate<br />
relations between <strong>the</strong> <strong>IEA</strong> and o<strong>the</strong>r international organizations and o<strong>the</strong>rs,<br />
but it contains no provision for co-ordination or subordination <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s<br />
Programme.<br />
<strong>The</strong> need for <strong>IEA</strong> autonomy was clearly understood by <strong>the</strong> Agency’s<br />
founders in <strong>1974</strong>. At that time sixteen Members <strong>of</strong> <strong>the</strong> OECD were <strong>the</strong><br />
founding Members. <strong>The</strong>re remained eight o<strong>the</strong>r OECD countries, Australia,<br />
France, Finland, Greece, Iceland, New Zealand, Norway and Portugal,<br />
which did not immediately join <strong>the</strong> <strong>IEA</strong>. Under <strong>the</strong>se circumstances, <strong>the</strong><br />
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Agency needed full autonomy within <strong>the</strong> OECD because <strong>of</strong> <strong>the</strong> <strong>the</strong>oretical<br />
power <strong>of</strong> even one <strong>of</strong> those eight countries to interfere with <strong>IEA</strong> measures<br />
under <strong>the</strong> normal OECD rules if <strong>the</strong>y were made applicable to <strong>IEA</strong> actions.<br />
But <strong>the</strong> problem was more than <strong>the</strong> understandable concern over such<br />
institutional and legal exposure. <strong>The</strong>re was also <strong>the</strong> question <strong>of</strong><br />
representation and operational perspective. <strong>The</strong> founders wished to ensure<br />
that <strong>the</strong> major actions <strong>of</strong> <strong>the</strong> Governing Board, particularly operational<br />
decisions and actions on energy policy questions, remained in <strong>the</strong> hands <strong>of</strong><br />
high-level government experts who came from ministries or government<br />
departments directly responsible for those matters, ra<strong>the</strong>r than OECD<br />
Delegations which <strong>of</strong>ten lacked comparable energy specialization expertise<br />
and found <strong>the</strong>ir efforts necessarily spread widely over a broad spectrum <strong>of</strong><br />
OECD responsibilities. <strong>The</strong>re was also concern about ensuring <strong>the</strong><br />
autonomy <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Secretariat, which would be headed by an Executive<br />
Director who would bring high expertise and recognition in <strong>the</strong> energy field<br />
and be directly responsible to <strong>the</strong> Governing Board. Autonomy was also<br />
necessary to ensure <strong>the</strong> integrity <strong>of</strong> <strong>the</strong> special procedures and readiness<br />
required for meeting <strong>the</strong> operational responsibilities <strong>of</strong> <strong>the</strong> Agency. Over<br />
time, <strong>of</strong> course, some <strong>of</strong> <strong>the</strong> institutional and legal risks diminished as more<br />
OECD Members joined <strong>the</strong> Agency. By mid-1992 all o<strong>the</strong>r OECD countries<br />
except Iceland had joined <strong>the</strong> Agency, making <strong>the</strong> membership <strong>of</strong> <strong>the</strong> two<br />
institutions all but congruent. As a consequence, <strong>the</strong> problem <strong>of</strong> direct<br />
Council interference with <strong>the</strong> <strong>IEA</strong> has almost entirely disappeared, but <strong>the</strong><br />
need for autonomy continues for <strong>the</strong> purpose <strong>of</strong> ensuring appropriate<br />
representation from capitals, voting rules for rapid decision-making, <strong>the</strong><br />
autonomy <strong>of</strong> <strong>the</strong> Executive Director and <strong>the</strong> Agency’s procedures and<br />
readiness as <strong>the</strong> Agency responds to <strong>the</strong> ever changing energy environment<br />
[See Chapter VII, Section B for fur<strong>the</strong>r consideration <strong>of</strong> <strong>IEA</strong> Programmes <strong>of</strong><br />
Work]. Today <strong>the</strong> need for <strong>IEA</strong> programme autonomy is as much a matter<br />
<strong>of</strong> concern as it was when <strong>the</strong> Agency was founded in <strong>1974</strong>.<br />
3. Financial Autonomy <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
<strong>The</strong> I.E.P. Agreement confers upon <strong>the</strong> Governing Board plenary powers<br />
over <strong>the</strong> financing <strong>of</strong> <strong>the</strong> Agency and its financial administration. In<br />
practice <strong>the</strong> financial operations <strong>of</strong> <strong>the</strong> Agency have been conducted within<br />
<strong>the</strong> administrative framework <strong>of</strong> <strong>the</strong> OECD. <strong>The</strong> Agency accordingly uses<br />
<strong>the</strong> OECD financial services, but <strong>the</strong> Governing Board’s powers extend fully<br />
over <strong>the</strong> entire range <strong>of</strong> financial affairs <strong>of</strong> <strong>the</strong> Agency.<br />
135
Pursuant to Article 64.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement, <strong>the</strong> expenses <strong>of</strong> <strong>the</strong><br />
Agency are to be shared by Members pursuant to a scale <strong>of</strong> contributions<br />
established according to <strong>the</strong> OECD rules adopted for that Organisation in<br />
1963 [C(63)155(Final)]. For <strong>the</strong> <strong>IEA</strong> <strong>the</strong> rules for elaborating <strong>the</strong> scale <strong>of</strong><br />
contribution can be amended only by <strong>the</strong> Governing Board, acting by<br />
unanimity [Article 64.1]. <strong>The</strong>y are not subject to formal amendment by <strong>the</strong><br />
OECD without explicit or tacit acceptance by <strong>the</strong> Governing Board.<br />
<strong>The</strong> I.E.P. Agreement places upon <strong>the</strong> Governing Board alone <strong>the</strong><br />
responsibility for making financial regulations for <strong>the</strong> Agency [Article 64.3],<br />
but <strong>the</strong> Board has used this power sparingly. As a matter <strong>of</strong> convenience<br />
and ease <strong>of</strong> administration, <strong>the</strong> Board has permitted <strong>the</strong> OECD Financial<br />
Regulations to be applied by <strong>the</strong> OECD in <strong>the</strong> transactions which it carries<br />
out for <strong>the</strong> Agency. However, <strong>the</strong> Board could at any time adopt Financial<br />
Regulations for <strong>the</strong> <strong>IEA</strong> or make o<strong>the</strong>r decisions <strong>of</strong> a like nature, and those<br />
actions would displace any inconsistent OECD rules, regulations and<br />
practices. In several instances <strong>the</strong> Council Decision itself has made <strong>the</strong><br />
displacement explicit, as for voluntary contributions and special activities<br />
for which <strong>the</strong> need for displacement was foreseen at <strong>the</strong> outset [See Council<br />
Decision, Article 10(c) and (d) and <strong>the</strong> second paragraph <strong>of</strong> <strong>the</strong> Preamble].<br />
After referring to contributions, special expenses, financial regulations<br />
and adoption <strong>of</strong> <strong>the</strong> Budget, Article 64 <strong>of</strong> <strong>the</strong> I.E.P. Agreement provides this<br />
in its paragraph 4<br />
<strong>The</strong> Governing Board, acting by majority, shall take all o<strong>the</strong>r necessary<br />
decisions regarding <strong>the</strong> financial administration <strong>of</strong> <strong>the</strong> Agency.<br />
Those provisions <strong>of</strong> <strong>the</strong> I.E.P. Agreement confer <strong>the</strong> widest powers<br />
concerning financial questions on <strong>the</strong> Governing Board; <strong>the</strong> Council<br />
Decision recognizes that Agreement (including its financial provisions) in<br />
<strong>the</strong> fourth paragraph <strong>of</strong> <strong>the</strong> Decision’s preamble. <strong>The</strong> <strong>IEA</strong> autonomy<br />
assured in Article 1 <strong>of</strong> that Decision and in <strong>the</strong> Board’s adoption <strong>of</strong> <strong>the</strong><br />
I.E.P. Agreement as a Program decision (under Article 6(a) <strong>of</strong> <strong>the</strong> Council<br />
Decision as well as o<strong>the</strong>r powers) thus combines with <strong>the</strong> quite independent<br />
I.E.P. Agreement provisions to give <strong>the</strong> Governing Board full power over all<br />
financial questions, including autonomy from <strong>the</strong> OECD Financial<br />
Regulations and o<strong>the</strong>r financial actions as well as o<strong>the</strong>r operations, should<br />
<strong>the</strong> Governing Board choose to exercise its powers.<br />
<strong>The</strong> autonomy <strong>of</strong> <strong>the</strong> Agency in respect to decisions on <strong>the</strong> Agency’s<br />
Budget warrants special mention. Under OECD procedures, <strong>the</strong> Budget <strong>of</strong><br />
<strong>the</strong> Organisation is adopted by <strong>the</strong> unanimous decision <strong>of</strong> <strong>the</strong> Council.<br />
136
Unanimity is required even for programmes limited to, and financed by a<br />
group not comprising all Member countries <strong>of</strong> <strong>the</strong> Organisation. Since <strong>the</strong><br />
budget power could be applied in a way that was inconsistent with <strong>the</strong><br />
wishes <strong>of</strong> <strong>the</strong> Agency countries, provision had to be made for <strong>the</strong> adoption<br />
<strong>of</strong> <strong>the</strong> <strong>IEA</strong> Budget by means <strong>of</strong> a procedure which would effectively exclude<br />
<strong>the</strong> vote <strong>of</strong> o<strong>the</strong>r countries and confirm <strong>the</strong> Budget decision which could be<br />
made by majority in <strong>the</strong> Governing Board. That was done by a provision in<br />
<strong>the</strong> Council Decision that <strong>the</strong> Governing Board would<br />
. . . submit <strong>the</strong> annual and o<strong>the</strong>r budget proposals <strong>of</strong> <strong>the</strong> Agency<br />
to <strong>the</strong> Council for adoption by agreement <strong>of</strong> those Participating<br />
Countries <strong>of</strong> <strong>the</strong> Agency which voted in <strong>the</strong> Governing Board to<br />
submit <strong>the</strong> proposals to <strong>the</strong> Council [Article 10(b)].<br />
By that provision, <strong>the</strong> non-<strong>IEA</strong> Members <strong>of</strong> <strong>the</strong> OECD transfer power over<br />
<strong>the</strong> Agency part <strong>of</strong> <strong>the</strong> OECD Budget. This makes possible <strong>the</strong> adoption <strong>of</strong><br />
<strong>the</strong> Agency Budget within <strong>the</strong> OECD Budget and retains Agency country<br />
control over Agency Budget decisions. Thus, <strong>the</strong> OECD Members not <strong>the</strong>n<br />
Members <strong>of</strong> <strong>the</strong> <strong>IEA</strong> agreed in effect to a form <strong>of</strong> perpetual abstention from<br />
voting in cases affecting <strong>the</strong> Agency’s Budget. Because <strong>of</strong> <strong>the</strong> importance <strong>of</strong><br />
Agency autonomy, <strong>the</strong> adoption <strong>of</strong> some such provision in <strong>the</strong> Council<br />
Decision was an indispensable condition for <strong>the</strong> agreement to establish <strong>the</strong><br />
Agency within <strong>the</strong> OECD.<br />
In practice <strong>the</strong> financial co-operation between <strong>the</strong> competent OECD<br />
<strong>of</strong>fices and <strong>the</strong> Agency has been quite beneficial to <strong>the</strong> <strong>IEA</strong>. <strong>The</strong> OECD<br />
provides assistance in <strong>the</strong> preparation and presentation <strong>of</strong> <strong>IEA</strong> Budgets, makes<br />
all staff payments, reviews contracts in <strong>the</strong> OECD Contracts Committee, and<br />
negotiates and makes contracts for supplies and o<strong>the</strong>r routine matters having<br />
no particular energy significance (normally <strong>the</strong> Agency staff itself negotiates<br />
and prepares <strong>the</strong> contracts which do have energy significance). OECD<br />
auditors examine <strong>IEA</strong> financial transactions carried out by <strong>the</strong> OECD and on<br />
two occasions to date <strong>the</strong>y have conducted broader audits <strong>of</strong> <strong>the</strong> <strong>IEA</strong> in<br />
accordance with OECD practice and with <strong>the</strong> agreement <strong>of</strong> <strong>the</strong> Governing<br />
Board [See Chapter VII, Section K below]. With <strong>the</strong> exception <strong>of</strong> voluntary<br />
contributions and special activities, most <strong>of</strong> <strong>the</strong> routine financial administration<br />
<strong>of</strong> <strong>the</strong> Agency is conducted by OECD financial staff pursuant to OECD rules.<br />
In <strong>the</strong> application <strong>of</strong> those rules, <strong>the</strong> OECD staff exercises judgement whenever<br />
possible in line with known <strong>IEA</strong> policies and procedures. On <strong>the</strong> whole this<br />
arrangement has proven to be quite workable with a minimum <strong>of</strong> friction or<br />
difficulty; it has <strong>the</strong> distinct advantage that <strong>the</strong> <strong>IEA</strong> avoids <strong>the</strong> dedication <strong>of</strong> its<br />
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esources to routine financial administration and <strong>the</strong> duplication <strong>of</strong> effort in a<br />
sector which has little policy impact on <strong>IEA</strong> operations [See Chapter VII below<br />
for fur<strong>the</strong>r consideration <strong>of</strong> budget and finance questions].<br />
4. Autonomy in Personnel Questions<br />
<strong>The</strong> Agency’s autonomy in personnel questions is assured by provisions in<br />
<strong>the</strong> I.E.P. Agreement as well as by <strong>the</strong> general autonomy provision <strong>of</strong> Article<br />
1 <strong>of</strong> <strong>the</strong> OECD Council Decision and <strong>the</strong> general provisions on <strong>the</strong><br />
Secretariat contained in Article 7 <strong>of</strong> that Decision. Parallel to <strong>the</strong> Agency’s<br />
financial administration, <strong>the</strong> Agency follows OECD personnel rules and<br />
practices generally and for reasons <strong>of</strong> convenience, but <strong>the</strong> Governing Board<br />
has in a number <strong>of</strong> situations developed its own rules and practices, and<br />
remains free to do so as a function <strong>of</strong> <strong>the</strong> Agency’s autonomy.<br />
Article 49.3 <strong>of</strong> <strong>the</strong> I.E.P. Agreement under <strong>the</strong> rubric “Institutional<br />
and General Provisions” states that<br />
<strong>The</strong> Agency shall have a Secretariat to assist <strong>the</strong> organs<br />
mentioned in paragraphs 1 and 2.<br />
(<strong>The</strong> organs are <strong>the</strong> Governing Board, a Management Committee, <strong>the</strong><br />
Standing Groups, and o<strong>the</strong>r organs established by <strong>the</strong> Governing Board).<br />
Unlike most international agreements establishing an organization,<br />
<strong>the</strong> I.E.P. Agreement confers on <strong>the</strong> Secretariat far-reaching operational<br />
responsibilities in <strong>the</strong> Emergency Sharing System, including <strong>the</strong> making <strong>of</strong><br />
<strong>the</strong> trigger decisions activating and deactivating <strong>the</strong> System and <strong>the</strong><br />
performance <strong>of</strong> certain legal obligations. For that purpose, <strong>of</strong> course, <strong>the</strong><br />
Secretariat needs <strong>the</strong> utmost autonomy. In order to ensure that autonomy,<br />
<strong>the</strong> I.E.P. Agreement provides this:<br />
Article 59.3<br />
In <strong>the</strong> performance <strong>of</strong> <strong>the</strong>ir duties under this Agreement <strong>the</strong><br />
Executive Director and <strong>the</strong> staff shall be responsible to and report<br />
to <strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency.<br />
Article 60<br />
<strong>The</strong> Secretariat shall carry out <strong>the</strong> functions assigned to it in this Agreement<br />
and any o<strong>the</strong>r functions assigned to it by <strong>the</strong> Governing Board.<br />
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Article 59.4<br />
<strong>The</strong> Governing Board, acting by majority, shall take all<br />
decisions necessary for <strong>the</strong> establishment and <strong>the</strong> functioning <strong>of</strong><br />
<strong>the</strong> Secretariat.<br />
<strong>The</strong> Agreement also provides that “<strong>The</strong> Secretariat shall be composed <strong>of</strong> an<br />
Executive Director and such staff as is necessary” [Article 59.1] and that <strong>the</strong><br />
Executive Director shall be appointed by <strong>the</strong> Governing Board [Article 59.2].<br />
<strong>The</strong> foregoing provisions constitute a complete system for <strong>the</strong><br />
autonomous Secretariat, regulating its composition and providing specific<br />
directions concerning its establishment, functioning and duties as<br />
determined solely by <strong>the</strong> Agreement and <strong>the</strong> Governing Board. <strong>The</strong>se are<br />
<strong>the</strong> priority provisions which govern relations between <strong>the</strong> <strong>IEA</strong> and <strong>the</strong><br />
OECD on personnel questions and give meaning to <strong>the</strong> Council Decision<br />
provisions on this subject.<br />
<strong>The</strong> relationship between <strong>the</strong> two organizations on personnel matters<br />
parallels those relations on financial questions discussed above. <strong>The</strong> I.E.P.<br />
provisions are paramount. In one case <strong>the</strong> Council Decision sets out a<br />
derogation from OECD rules [Article 7(c)] on consultants. However, <strong>the</strong><br />
general autonomy provision <strong>of</strong> Article 1 applies to personnel as well as to<br />
o<strong>the</strong>r matters.<br />
<strong>The</strong> relevant personnel provisions <strong>of</strong> <strong>the</strong> Council Decision are as follows:<br />
Article 7<br />
(a) <strong>The</strong> organs <strong>of</strong> <strong>the</strong> Agency shall be assisted by an Executive<br />
Director and such staff as is necessary who shall form part <strong>of</strong><br />
<strong>the</strong> Secretariat <strong>of</strong> <strong>the</strong> Organisation and who shall, in performing<br />
<strong>the</strong>ir duties under <strong>the</strong> International Energy Program, be<br />
responsible to and report to <strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency.<br />
(b) <strong>The</strong> Executive Director shall be appointed by <strong>the</strong><br />
Governing Board on <strong>the</strong> proposal or with <strong>the</strong> concurrence<br />
<strong>of</strong> <strong>the</strong> Secretary-General.<br />
Paragraph (a) generally tracks <strong>the</strong> corresponding parts <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement quoted above, except for <strong>the</strong> provision that <strong>the</strong> Executive<br />
Director and <strong>the</strong> staff shall form part <strong>of</strong> <strong>the</strong> Secretariat <strong>of</strong> <strong>the</strong> Organisation.<br />
<strong>The</strong>ir autonomy from <strong>the</strong> OECD in matters <strong>of</strong> substance remains quite<br />
clear. In paragraph (b) <strong>the</strong> role <strong>of</strong> <strong>the</strong> Secretary-General in <strong>the</strong><br />
139
appointment <strong>of</strong> <strong>the</strong> Executive Director does not appear in <strong>the</strong> I.E.P.<br />
Agreement. Those provisions were added to ensure that <strong>the</strong> Secretariat<br />
would, in <strong>the</strong> absence <strong>of</strong> Governing Board decisions to <strong>the</strong> contrary, enjoy<br />
<strong>the</strong> status <strong>of</strong> OECD staff for purposes <strong>of</strong> remuneration and benefits,<br />
privileges and immunities and general administration, and to ensure that<br />
<strong>the</strong> Executive Director would be appointed upon <strong>the</strong> proposal <strong>of</strong> <strong>the</strong><br />
Secretary-General or with his concurrence. <strong>The</strong> effect <strong>of</strong> those provisions<br />
was to adopt for <strong>the</strong> <strong>IEA</strong> <strong>the</strong> general staff rules and regulations, and <strong>the</strong><br />
instructions and procedures <strong>of</strong> <strong>the</strong> OECD for appointments, rights and<br />
duties, benefits, discipline and so forth, unless <strong>the</strong> Governing Board should<br />
adopt o<strong>the</strong>r provisions under <strong>the</strong> autonomy power and <strong>the</strong> I.E.P. Agreement<br />
provisions quoted above.<br />
<strong>The</strong> Governing Board regularly exercises its powers over <strong>the</strong><br />
Secretariat with respect to substantive matters. At its first meeting, for<br />
example, <strong>the</strong> Board agreed [<strong>IEA</strong>/GB(74)9(1st Revision), Item 9] that<br />
■<br />
■<br />
■<br />
■<br />
<strong>The</strong> <strong>IEA</strong> staff should be free to work on Agency priorities, and <strong>the</strong><br />
Budget should reflect this element.<br />
<strong>The</strong> Governing Board should consider arrangements for staff<br />
to be aligned in <strong>the</strong> Secretariat to correspond with <strong>the</strong> Standing<br />
Groups.<br />
<strong>The</strong> Executive Director could begin exploring for staff with a view to<br />
obtaining <strong>the</strong> high quality staff needed as quickly as possible.<br />
<strong>The</strong> Budget Committee should consider staff priority needs for <strong>the</strong><br />
Agency to become operational.<br />
Throughout <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong> Board has continued to make<br />
decisions on <strong>the</strong> structure and composition <strong>of</strong> <strong>the</strong> Secretariat, to give<br />
instructions to <strong>the</strong> Secretariat on work to be carried out and to set<br />
priorities. One may take a recent Governing Board meeting as a current<br />
example. At its December 1991 meeting <strong>the</strong> Governing Board<br />
[<strong>IEA</strong>/GB(91)79, Items 5-7]:<br />
■<br />
■<br />
requested <strong>the</strong> Secretariat to continue <strong>IEA</strong> activities with respect to <strong>the</strong><br />
former Soviet Union, including <strong>the</strong> follow-up mission next year, and<br />
to report fur<strong>the</strong>r on this subject at <strong>the</strong> Governing Board’s next<br />
meeting [Item 5(a)(ii)];<br />
noted <strong>the</strong> readiness <strong>of</strong> <strong>the</strong> Secretariat to continue to respond to <strong>the</strong><br />
Czechoslovakian request for assistance in making preparations for<br />
possible oil supply disruptions [Item 5(b)];<br />
140
■<br />
■<br />
■<br />
■<br />
■<br />
authorized <strong>the</strong> Executive Director to carry out a programme <strong>of</strong><br />
co-operative activities with <strong>the</strong> Republic <strong>of</strong> Korea [Item 5(e)<br />
(ii)];<br />
instructed <strong>the</strong> Executive Director to circulate to all Delegations <strong>of</strong><br />
Member countries requests for Associate participation in <strong>IEA</strong> R & D<br />
Implementing Agreements in accordance with <strong>the</strong> Guiding Principles<br />
[Item 5(f)(c)(i)];<br />
requested <strong>the</strong> Secretariat to develop fur<strong>the</strong>r <strong>the</strong> concept <strong>of</strong> <strong>the</strong> TIES<br />
proposal (<strong>IEA</strong>/OECD Technology Information System) [Item 6(c)],<br />
subsequently bearing <strong>the</strong> name <strong>of</strong> Greenhouse Gas Technology<br />
Information Exchange “GREENTIE”;<br />
in connection with <strong>the</strong> 1992 Budget, endorsed <strong>the</strong> Executive<br />
Director’s efforts to keep Delegations informed as to pr<strong>of</strong>essional staff<br />
recruitment, invited <strong>the</strong> Executive Director to keep Delegations and<br />
relevant bodies informed <strong>of</strong> consultancy projects and costs related<br />
<strong>the</strong>reto, and carried over authorizations to <strong>the</strong> Executive Director<br />
concerning commitment <strong>of</strong> funds in <strong>the</strong> event <strong>of</strong> activation <strong>of</strong> <strong>the</strong><br />
Emergency Sharing System and concerning <strong>the</strong> recruitment <strong>of</strong><br />
“project staff” [Item 7(m),(n),(p) and (q)];<br />
requested <strong>the</strong> Secretariat to support <strong>the</strong> three Baltic countries as set<br />
forth in <strong>the</strong> letter from <strong>the</strong> Danish Government [Item 11(b)(ii)].<br />
In practice <strong>the</strong> OECD regime has been applied successfully to <strong>the</strong> <strong>IEA</strong> with<br />
a minimum <strong>of</strong> difficulty, thanks to a considerable measure <strong>of</strong><br />
understanding and flexibility on both sides. In only a few cases has <strong>the</strong><br />
Governing Board adopted its own measure at variance with <strong>the</strong><br />
corresponding OECD measure to legislate on staff policy and procedure.<br />
At its first meeting, <strong>the</strong> Board appointed Mr. Ulf Lantzke as Executive<br />
Director in accordance with Article 7 <strong>of</strong> <strong>the</strong> OECD Decision, upon <strong>the</strong><br />
proposal <strong>of</strong> <strong>the</strong> Secretary-General. However, OECD procedures concerning<br />
<strong>the</strong> duration <strong>of</strong> his term <strong>of</strong> <strong>of</strong>fice were set aside. Since no duration was<br />
fixed, he served in effect at <strong>the</strong> pleasure <strong>of</strong> <strong>the</strong> Board, as does Mrs. Steeg as<br />
Executive Director under a later and parallel decision <strong>of</strong> <strong>the</strong> Governing<br />
Board [See Chapter VI, Section E-4].<br />
At its second meeting, <strong>the</strong> Board decided to freeze certain posts and<br />
authorized <strong>the</strong> <strong>IEA</strong> Committee on Budget and Expenditure to “unfreeze<br />
any or all <strong>of</strong> <strong>the</strong>se posts upon satisfactory demonstration <strong>of</strong> need by <strong>the</strong><br />
Executive Director” [<strong>IEA</strong>/GB(74)11(1st Revision), Item 5(e)]. At that<br />
time <strong>the</strong> Board also adopted <strong>the</strong> <strong>IEA</strong> “three year appointment policy” by<br />
inviting<br />
141
<strong>the</strong> Executive Director to recruit mainly government <strong>of</strong>ficials<br />
for <strong>the</strong> A-grade posts and to recruit this staff on a fixed term<br />
basis (staff members currently having indefinite appointments<br />
with <strong>the</strong> OECD would retain <strong>the</strong>m) for, in principle,<br />
approximately three years with necessary flexibility in duration<br />
on a case by case basis [Item (f)].<br />
In addition <strong>the</strong> Governing Board has made key decisions concerning <strong>the</strong><br />
level <strong>of</strong> <strong>the</strong> post <strong>of</strong> Executive Director and has fixed <strong>the</strong> Executive Director’s<br />
terms <strong>of</strong> employment quite independently <strong>of</strong> <strong>the</strong> OECD [See Chapter VI,<br />
Section E below].<br />
Over <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency <strong>the</strong>re have been only a few areas in<br />
which <strong>the</strong> <strong>IEA</strong> and <strong>the</strong> OECD have differed on questions <strong>of</strong> personnel<br />
administration. One <strong>of</strong> <strong>the</strong>se is <strong>the</strong> role <strong>of</strong> <strong>the</strong> OECD Staff Boards in<br />
recruitment matters. <strong>The</strong> <strong>IEA</strong> has considered that it alone was qualified to<br />
set recruitment standards, while at times <strong>the</strong> OECD Boards have tended to<br />
apply to <strong>IEA</strong> cases <strong>the</strong> standards employed for <strong>the</strong> OECD. By and large<br />
questions <strong>of</strong> this kind have been resolved by accommodation. <strong>The</strong> OECD<br />
understands that in recruiting staff <strong>the</strong> <strong>IEA</strong> must consider <strong>the</strong> operational<br />
nature <strong>of</strong> <strong>IEA</strong> work and <strong>the</strong> absence <strong>of</strong> career opportunities in <strong>the</strong> Agency.<br />
<strong>The</strong> Agency’s appointment <strong>of</strong> “project staff” to regular staff posts after a<br />
period <strong>of</strong> testing has at times been questioned by <strong>the</strong> OECD. Yet <strong>the</strong> <strong>IEA</strong><br />
has accepted <strong>the</strong> OECD procedures for regrading posts and o<strong>the</strong>r<br />
procedures which sometimes have run against <strong>the</strong> direction <strong>of</strong> preferred <strong>IEA</strong><br />
policy. On such issues both <strong>the</strong> OECD and <strong>the</strong> <strong>IEA</strong> staffs have successfully<br />
avoided confrontation or submissions to decisional bodies, and<br />
accommodations have been found.<br />
<strong>The</strong> basis <strong>of</strong> co-operation between <strong>the</strong> <strong>IEA</strong> and <strong>the</strong> OECD on<br />
personnel matters is <strong>the</strong> provision <strong>of</strong> administrative support to <strong>the</strong> <strong>IEA</strong> by<br />
<strong>the</strong> OECD without interference by OECD procedures. That basis <strong>of</strong> cooperation<br />
was essentially <strong>the</strong> bargain that was made to bring <strong>the</strong> Agency<br />
into <strong>the</strong> OECD in <strong>the</strong> face <strong>of</strong> opposition by some Governments precisely<br />
on this point <strong>of</strong> autonomy in personnel matters. Since <strong>the</strong> making <strong>of</strong><br />
policy is <strong>the</strong> prerogative <strong>of</strong> <strong>the</strong> Agency under <strong>the</strong> governing texts,<br />
problems for <strong>the</strong> <strong>IEA</strong> have arisen when <strong>the</strong> OECD has sought to move<br />
beyond administrative support to including <strong>the</strong> <strong>IEA</strong> within <strong>the</strong> scope <strong>of</strong> its<br />
personnel policies. Such questions are to be resolved by <strong>the</strong> Governing<br />
Board in application <strong>of</strong> its personnel powers and <strong>the</strong> rules <strong>of</strong> autonomy.<br />
Autonomy in personnel questions is fur<strong>the</strong>r discussed in Chapter VI<br />
below.<br />
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D. Competence in External Relations<br />
1. General Purposes and Powers<br />
<strong>The</strong> Agency’s control over its operations extends beyond programme and<br />
administration to include its control over <strong>the</strong> Agency’s external relations. It<br />
was absolutely clear from <strong>the</strong> outset <strong>of</strong> <strong>the</strong> developments leading up to <strong>the</strong><br />
formation <strong>of</strong> <strong>the</strong> <strong>IEA</strong> [See Chapter II above] that <strong>the</strong> new Agency would<br />
have to be deeply involved in external relations across <strong>the</strong> entire spectrum <strong>of</strong><br />
<strong>the</strong> Agency’s functions. <strong>The</strong>re was never any thought that <strong>the</strong> oil consuming<br />
countries grouped toge<strong>the</strong>r in <strong>the</strong> Agency could isolate <strong>the</strong>mselves in formal<br />
or operational terms from <strong>the</strong> rest <strong>of</strong> <strong>the</strong> energy consuming and producing<br />
world. Co-operation in energy was seen not only as co-operation among<br />
Agency countries <strong>the</strong>mselves, but also as co-operation between <strong>the</strong>m and <strong>the</strong><br />
Agency as an international institution on <strong>the</strong> one hand, and <strong>the</strong> rest <strong>of</strong> <strong>the</strong><br />
energy world on <strong>the</strong> o<strong>the</strong>r. This broad concept <strong>of</strong> co-operation was<br />
explicitly stated in <strong>the</strong> Communiqué <strong>of</strong> <strong>the</strong> Washington Energy Conference<br />
on 13 February <strong>1974</strong>, in <strong>the</strong> early preparatory stages <strong>of</strong> <strong>the</strong> Agency [See<br />
Chapter II, Section C-2 above]. Participants “agreed that <strong>the</strong>re was need to<br />
develop a cooperative multilateral relationship with producing countries,<br />
and o<strong>the</strong>r consumer countries that takes into account <strong>the</strong> long-term<br />
interests <strong>of</strong> all” [paragraph 14]; in that context <strong>the</strong>y also referred to <strong>the</strong> role<br />
<strong>of</strong> <strong>the</strong> international oil companies, initiatives in <strong>the</strong> United Nations, <strong>the</strong><br />
consumer and producer country conference, and consultations with<br />
developing countries and o<strong>the</strong>r consumer and producer countries. All <strong>of</strong><br />
<strong>the</strong>se references indirectly found <strong>the</strong>ir way into <strong>the</strong> I.E.P. Agreement which,<br />
inter alia, states <strong>the</strong> founders’ objectives concerning international energy<br />
relations and provides <strong>the</strong> broad institutional framework for such cooperation<br />
with o<strong>the</strong>r countries and organizations.<br />
<strong>The</strong> co-operation objective appears in quite comprehensive terms in<br />
several paragraphs <strong>of</strong> <strong>the</strong> Preamble to <strong>the</strong> I.E.P. Agreement [paragraphs 3-5]<br />
whereby <strong>the</strong> Members state that <strong>the</strong>y are<br />
DESIRING to promote co-operative relations with oil producing<br />
countries and with o<strong>the</strong>r oil consuming countries, including<br />
those <strong>of</strong> <strong>the</strong> developing world, through a purposeful dialogue,<br />
as well as through o<strong>the</strong>r forms <strong>of</strong> co-operation, to fur<strong>the</strong>r <strong>the</strong><br />
opportunities for a better understanding between consumer and<br />
producer countries,<br />
MINDFUL <strong>of</strong> <strong>the</strong> interests <strong>of</strong> <strong>the</strong> o<strong>the</strong>r oil consuming countries,<br />
including those <strong>of</strong> <strong>the</strong> developing world,<br />
143
DESIRING to play a more active role in relation to <strong>the</strong> oil industry by<br />
establishing a comprehensive international information system and a<br />
permanent framework for consultation with oil companies.<br />
<strong>The</strong> absence <strong>of</strong> an adversarial approach towards o<strong>the</strong>r areas <strong>of</strong> <strong>the</strong> world is<br />
apparent in Article 11 <strong>of</strong> <strong>the</strong> Agreement, which makes it clear that <strong>IEA</strong><br />
countries do not intend “to seek to increase, in an emergency, <strong>the</strong> share <strong>of</strong><br />
world oil supply that <strong>the</strong> group had under normal market conditions”.<br />
More specifically: “Historical oil trade patterns should be preserved as far as<br />
is reasonable, and due account should be taken <strong>of</strong> <strong>the</strong> position <strong>of</strong> individual<br />
non-participating countries”. <strong>The</strong> Agency’s approach would thus be one <strong>of</strong><br />
fairness and constructive co-operation in its external relations, as <strong>the</strong> more<br />
specific texts <strong>of</strong> <strong>the</strong> Agreement confirm and <strong>the</strong> actual external relations <strong>of</strong><br />
<strong>the</strong> Agency have shown.<br />
<strong>The</strong> desired co-operation took textual form in <strong>the</strong> body <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement in a number <strong>of</strong> specific mandates and in a general grant <strong>of</strong><br />
external relations powers. <strong>The</strong> principal specific mandate is contained in<br />
Chapter VIII entitled “Relations with Producer Countries and with o<strong>the</strong>r<br />
Consumer Countries”. This Chapter restates <strong>the</strong> objectives concerning<br />
o<strong>the</strong>r countries [Article 44] and states <strong>the</strong> commitments <strong>of</strong> members (1) to<br />
give full consideration to <strong>the</strong> needs <strong>of</strong> o<strong>the</strong>r consumer countries, particularly<br />
developing countries [Article 45], (2) to keep developments under review<br />
for that purpose [Article 44], (3) to exchange views on <strong>the</strong>ir relations with<br />
producer countries [Article 46], (4) to seek opportunities and means <strong>of</strong><br />
encouraging stable oil trade and secure supplies, (5) to consider o<strong>the</strong>r<br />
possible fields <strong>of</strong> co-operation and (6) to “keep under review <strong>the</strong> prospects<br />
for co-operation with oil producing countries on energy questions <strong>of</strong> mutual<br />
interest, such as conservation <strong>of</strong> energy, <strong>the</strong> development <strong>of</strong> alternative<br />
sources, and research and development” [Article 47].<br />
Responsibilities in <strong>the</strong> external relations sector have been conferred on<br />
two <strong>IEA</strong> plenary bodies, first <strong>the</strong> Standing Group on Relations with<br />
Producer and o<strong>the</strong>r Consumer Countries [I.E.P. Agreement Articles 44-48<br />
and 58], and later (from 1977 on) <strong>the</strong> Ad Hoc Group on International<br />
Energy Relations [See <strong>IEA</strong>/GB(77)33, Item 8] which from 1990 has been<br />
known as <strong>the</strong> Committee on Non-Member Countries [See <strong>IEA</strong>/GB(90)46,<br />
Item 6]. <strong>The</strong>se bodies are described more fully in Section D-2 below.<br />
<strong>The</strong> I.E.P. Agreement was equally specific about relations with oil<br />
companies. Chapter VI mandates <strong>the</strong> establishment within <strong>the</strong> Agency <strong>of</strong> a<br />
permanent framework for consultations with oil companies and information<br />
requests “on all important aspects <strong>of</strong> <strong>the</strong> oil industry” [See Article 37]. <strong>The</strong><br />
144
mandate was quickly carried out by Governing Board actions adopted in<br />
February 1975 which established <strong>the</strong> “Procedures for Consultations with<br />
Oil Companies” (proposed to <strong>the</strong> Board by <strong>the</strong> Standing Group on <strong>the</strong> Oil<br />
Market in document <strong>IEA</strong>/SOM(75)2, dated 4 February 1975)<br />
[<strong>IEA</strong>/GB(75)8, Item 8(a)]. Those Procedures provided <strong>the</strong> basis for <strong>the</strong><br />
many oil company consultations which have since taken place on a regular<br />
basis in accordance with Chapter VI <strong>of</strong> <strong>the</strong> Agreement. <strong>IEA</strong> consultations<br />
with oil companies on <strong>the</strong> subject <strong>of</strong> <strong>the</strong> oil market and activities <strong>of</strong> oil<br />
companies [called <strong>the</strong> “General Section <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Information System”; on<br />
<strong>the</strong> oil market and oil company activities, see Chapter V <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement] are provided for in Article 30 “to ensure that <strong>the</strong> System is<br />
compatible with industry operations”. That process has been carried out by<br />
<strong>the</strong> <strong>IEA</strong> Industry Working Party (IWP) established by oil companies for that<br />
purpose, working toge<strong>the</strong>r with <strong>the</strong> Standing Group on <strong>the</strong> Oil Market.<br />
Moreover, <strong>the</strong> Standing Group on Relations with Producer and o<strong>the</strong>r<br />
Consumer Countries was empowered to “consult with oil companies on any<br />
matter within its competence” [Article 58.3].<br />
Close contacts with oil companies were also foreseen as part <strong>of</strong> <strong>the</strong><br />
<strong>IEA</strong> Emergency Sharing System, regarding both <strong>the</strong> Special Section <strong>of</strong> <strong>the</strong><br />
Oil Information System (oil emergency information) and <strong>the</strong> oil Emergency<br />
Sharing System. <strong>The</strong>se industry functions have been carried out principally<br />
by means <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Industry Advisory Board (IAB) [See Chapter V, Section<br />
A-17(d)] and bilateral contacts between <strong>the</strong> Secretariat and oil company<br />
representatives. As respects <strong>the</strong> emergency oil information system, industry<br />
provides its advice pursuant to Article 35, again “to ensure that <strong>the</strong> System<br />
is compatible with industry operations”. However, <strong>the</strong> IAB is also directly<br />
involved, in an advisory capacity and on a regular basis, in <strong>the</strong> development<br />
and testing <strong>of</strong> <strong>the</strong> Emergency Sharing System. In <strong>the</strong> event that <strong>the</strong><br />
Secretariat considers making a Sharing System “finding” which would<br />
trigger <strong>the</strong> Sharing System, “<strong>the</strong> Secretariat shall consult with oil companies<br />
to obtain <strong>the</strong>ir views regarding <strong>the</strong> situation and <strong>the</strong> appropriateness <strong>of</strong> <strong>the</strong><br />
measures to be taken” [I.E.P. Agreement, Article 19.6]. <strong>The</strong> operational<br />
functions <strong>of</strong> <strong>the</strong> oil industry are foreseen in Article 19.7 which provides that<br />
“An international advisory board from <strong>the</strong> oil industry shall be convened,<br />
not later than <strong>the</strong> activation <strong>of</strong> emergency measures, to assist <strong>the</strong> Agency in<br />
ensuring <strong>the</strong> effective operation <strong>of</strong> such measures”.<br />
Apart from <strong>the</strong> relatively sharp focus <strong>of</strong> <strong>the</strong> foregoing external relations<br />
mandates concerning non-Members <strong>of</strong> <strong>the</strong> Agency and oil companies, <strong>the</strong><br />
Agency was granted a far-reaching and all but complete power to enter into<br />
<strong>the</strong> external relations required to realize <strong>the</strong> objectives <strong>of</strong> <strong>the</strong> Agency. This<br />
145
was established in both <strong>the</strong> I.E.P. Agreement [Article 63] and in <strong>the</strong> Council<br />
Decision [Article 12]. Thus I.E.P. Article 63 provides this:<br />
In order to achieve <strong>the</strong> objectives <strong>of</strong> <strong>the</strong> Program, <strong>the</strong> Agency<br />
may establish appropriate relations with non-participating<br />
countries, international organisations, whe<strong>the</strong>r governmental or<br />
non-governmental, o<strong>the</strong>r entities and individuals.<br />
This text broadens and deepens <strong>the</strong> specific mandates found elsewhere in<br />
<strong>the</strong> I.E.P. Agreement. <strong>The</strong> only practical limitation on <strong>the</strong> external<br />
relations powers <strong>of</strong> <strong>the</strong> Agency is that <strong>the</strong> powers must be reasonably<br />
linked to <strong>the</strong> achievement <strong>of</strong> “<strong>the</strong> objectives <strong>of</strong> <strong>the</strong> Program”, which<br />
means that <strong>the</strong>y must be related, however broadly or narrowly, to<br />
international co-operation on energy. A potential second limitation might<br />
be seen in <strong>the</strong> language referring to “appropriate relations”, but that<br />
would seem to be only a <strong>the</strong>oretical limitation because it is subjective in<br />
nature and in <strong>the</strong> last analysis lets <strong>the</strong> Governing Board make its own<br />
judgements. This broad grant <strong>of</strong> authority was intentionally designed to<br />
give <strong>the</strong> Agency <strong>the</strong> widest latitude and flexibility in determining <strong>the</strong><br />
nature, scope and form <strong>of</strong> its external relations and <strong>the</strong> identity <strong>of</strong> <strong>the</strong><br />
particular parties with which those relations would be entered into. By<br />
referring to “<strong>the</strong> Agency” having such powers, <strong>the</strong> text leaves open <strong>the</strong><br />
possibility that <strong>the</strong> Executive Director might exercise external relations<br />
functions independently, which indeed <strong>the</strong> Executive Director does,<br />
subject to <strong>the</strong> overall control <strong>of</strong> <strong>the</strong> Governing Board which retains <strong>the</strong><br />
ultimate responsibility in this and o<strong>the</strong>r sectors.<br />
<strong>The</strong> Agency exercises its external relations powers, it should be added,<br />
in complete formal autonomy from <strong>the</strong> OECD. Nei<strong>the</strong>r <strong>the</strong> I.E.P.<br />
Agreement nor <strong>the</strong> Council Decision links in any way <strong>the</strong> Agency’s external<br />
relations powers to those <strong>of</strong> <strong>the</strong> OECD. Whereas <strong>the</strong> OECD may need<br />
Council authorization to act externally, no such Council action is necessary<br />
to authorize <strong>IEA</strong> external activities and indeed none has ever been proposed<br />
or considered in <strong>IEA</strong> bodies. Although <strong>the</strong> I.E.P. Agreement Article 63 text<br />
is parallel to Article 12 <strong>of</strong> <strong>the</strong> Council Decision, <strong>the</strong> I.E.P. text stands alone<br />
in establishing a full and sufficient external relations power, and <strong>the</strong> Council<br />
Decision text serves only to ensure that <strong>the</strong>re is no doubt about <strong>the</strong> powers<br />
<strong>of</strong> <strong>the</strong> Agency vis-à-vis those <strong>of</strong> <strong>the</strong> OECD Council and <strong>the</strong> Secretary-<br />
General. Thus <strong>the</strong> Agency’s power over external relations does not depend<br />
upon action by <strong>the</strong> OECD Council, but may be freely exercised by <strong>the</strong><br />
Agency under its own responsibility.<br />
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<strong>The</strong> I.E.P. Article 63 grant <strong>of</strong> external relations powers, supported by<br />
<strong>the</strong> specific I.E.P. Agreement mandates referred to above, is <strong>the</strong> formal source<br />
<strong>of</strong> competence for most Agency relations with o<strong>the</strong>rs. It provides <strong>the</strong> basis for<br />
<strong>the</strong> Agreement with Norway [See Section A-3 above], for <strong>IEA</strong> relations with<br />
<strong>the</strong> oil producing countries and with o<strong>the</strong>r oil consuming countries, and for<br />
<strong>the</strong> enhanced relations in recent years with <strong>the</strong> Central and Eastern European<br />
countries, Korea, Mexico and o<strong>the</strong>r countries, as well as <strong>the</strong> United Nations,<br />
<strong>the</strong> World Bank, <strong>the</strong> Latin American Energy Organization (OLADE), <strong>the</strong><br />
Asian Development Bank, o<strong>the</strong>r international organizations and a multitude<br />
<strong>of</strong> o<strong>the</strong>r entities and individuals. <strong>The</strong> particular status <strong>of</strong> <strong>the</strong> European<br />
Communities (European Union) within <strong>the</strong> Agency is described in Section<br />
D-3 below in this Chapter, and <strong>the</strong> Agency’s relationship <strong>of</strong> autonomy with<br />
<strong>the</strong> OECD is described in Section C immediately above.<br />
In addition to <strong>the</strong> o<strong>the</strong>r provisions on <strong>the</strong> Agency’s relations with<br />
OECD discussed above, Article 9 <strong>of</strong> <strong>the</strong> Council Decision states that “<strong>The</strong><br />
Agency shall co-operate with o<strong>the</strong>r competent bodies <strong>of</strong> <strong>the</strong> Organisation in<br />
areas <strong>of</strong> common interest. <strong>The</strong>se bodies and <strong>the</strong> Agency shall consult with<br />
one ano<strong>the</strong>r regarding <strong>the</strong>ir respective activities”. That co-operation has<br />
been quite extensive and successful in practice. For <strong>the</strong> <strong>IEA</strong> it has involved<br />
<strong>the</strong> Governing Board, <strong>the</strong> Standing Groups and Committees; and for <strong>the</strong><br />
OECD, <strong>the</strong> Council, <strong>the</strong> Executive Committee in Special Session, bodies <strong>of</strong><br />
<strong>the</strong> OECD Nuclear Energy Agency, <strong>the</strong> Environment Committee and o<strong>the</strong>rs.<br />
When those relations have concerned substantive questions ra<strong>the</strong>r than<br />
formal housekeeping questions, <strong>the</strong>y have been regarded as “external” to<br />
<strong>the</strong> <strong>IEA</strong> (in <strong>the</strong> sense that <strong>the</strong>y do not impinge on <strong>the</strong> Agency’s autonomy),<br />
despite <strong>the</strong> fact that <strong>the</strong> <strong>IEA</strong> was established administratively as part <strong>of</strong> <strong>the</strong><br />
OECD formal structure.<br />
Since <strong>the</strong> world developments in <strong>the</strong> early 1990s have brought about<br />
a decided widening in <strong>the</strong> scope <strong>of</strong> <strong>IEA</strong> activities with Central and Eastern<br />
Europe and with a number <strong>of</strong> countries in o<strong>the</strong>r parts <strong>of</strong> <strong>the</strong> world seeking<br />
closer relations to <strong>the</strong> Agency, <strong>the</strong> external relations powers <strong>of</strong> <strong>the</strong> Agency<br />
are an increasingly important part <strong>of</strong> <strong>the</strong> institutional tools which enable <strong>the</strong><br />
Agency to carry out its broad objectives as set forth in <strong>the</strong> I.E.P. Agreement.<br />
2. Committee on Non-Member Countries (NMC)<br />
Initially <strong>the</strong> Agency’s relations with non-Members were developed in <strong>the</strong><br />
Standing Group on Relations with Producer and o<strong>the</strong>r Consumer Countries,<br />
pursuant to Chapter VIII and Article 58 <strong>of</strong> <strong>the</strong> I.E.P. Agreement, in<br />
preparation for <strong>the</strong> operational decisions to be taken by <strong>the</strong> Governing<br />
147
Board. Under Article 48, <strong>the</strong> mandate <strong>of</strong> <strong>the</strong> Standing Group was to<br />
examine and report to <strong>the</strong> Management Committee (in practice <strong>the</strong><br />
Governing Board and <strong>the</strong> Management Committee meeting toge<strong>the</strong>r at<br />
Board level) and “to carry out <strong>the</strong> functions assigned to it in Chapter VIII<br />
and any o<strong>the</strong>r function delegated to it by <strong>the</strong> Governing Board”. <strong>The</strong><br />
Standing Group was to “review and report” on any matter within <strong>the</strong> scope<br />
<strong>of</strong> Chapter VIII, and to “consult with oil companies on any matter within its<br />
competence” [Article 58].<br />
After <strong>the</strong> Standing Group had operated several years under this<br />
mandate, <strong>the</strong> Governing Board considered that it needed direct advice from<br />
Members’ <strong>of</strong>ficials who were directly responsible in <strong>the</strong>ir capitals for<br />
international energy relations and it realized that <strong>the</strong> Standing Group was<br />
not always best suited to meet that need. <strong>The</strong> Board <strong>the</strong>n decided in June<br />
1977 to establish an informal Ad Hoc Group on International Energy<br />
Relations, initially chaired by Mr. R. A. Burrows (United Kingdom) and<br />
<strong>of</strong>ten called <strong>the</strong> “Burrows Group” at <strong>the</strong> time, as a result. <strong>The</strong> mandate <strong>of</strong><br />
<strong>the</strong> Ad Hoc Group was “to report to <strong>the</strong> Governing Board on international<br />
energy relations and to carry out such o<strong>the</strong>r functions as may be assigned to<br />
it by <strong>the</strong> Governing Board” [<strong>IEA</strong>/GB(77)33, Item 8]. Once <strong>the</strong> Ad Hoc<br />
Group began to meet, its suitability as <strong>the</strong> general forum was apparent, with<br />
<strong>the</strong> consequence that meetings <strong>of</strong> <strong>the</strong> Standing Group were no longer<br />
necessary. <strong>The</strong> functions <strong>of</strong> <strong>the</strong> Standing Group were <strong>the</strong>reafter fully taken<br />
over by <strong>the</strong> Ad Hoc Group, now called <strong>the</strong> Committee on Non-Member<br />
Countries. <strong>The</strong> Standing Group continues to exist formally under Article<br />
49.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement, and for many years <strong>the</strong> Chairman <strong>of</strong> <strong>the</strong><br />
Committee on Non-Member Countries was also elected Chairman <strong>of</strong> <strong>the</strong><br />
Standing Group. Although it has fallen into disuse and serves no<br />
discernible current purpose, <strong>the</strong> Standing Group may be abolished only by<br />
formal amendment <strong>of</strong> <strong>the</strong> Agreement, a procedure which has not been<br />
considered necessary or desirable. <strong>The</strong> general and more or less permanent<br />
mandates <strong>of</strong> <strong>the</strong> Standing Group and <strong>the</strong> Committee are set forth in <strong>the</strong><br />
OECD’s document “List <strong>of</strong> Bodies <strong>of</strong> <strong>the</strong> Organisation -Mandates -<br />
Membership-Officers”, updated annually [See also <strong>IEA</strong>/GB(89)36, Item 5].<br />
By and large <strong>the</strong>se <strong>IEA</strong> external relations bodies have carried out <strong>the</strong>ir<br />
work under <strong>the</strong>ir broad mandates and have reported confidentially to <strong>the</strong><br />
Governing Board (<strong>of</strong>ten in private, evening or mid-day sessions limited to<br />
Heads <strong>of</strong> Governing Board Delegations). <strong>The</strong> Board’s Conclusions on those<br />
reports have usually been limited to simply “noting” <strong>the</strong> reports (without<br />
recording specific findings or agreed actions), or occasionally to making<br />
slight shifts in emphasis in <strong>the</strong> Committee’s work.<br />
148
One important case in which <strong>the</strong> Governing Board’s Conclusions went<br />
beyond a simple noting or shifting <strong>of</strong> emphasis was <strong>the</strong> text adopted on<br />
11 May 1992 [<strong>IEA</strong>/GB(92)25, Item 5] on <strong>the</strong> basis <strong>of</strong> <strong>the</strong> Secretariat’s<br />
document entitled “Participation by Non-Member Countries in <strong>the</strong><br />
Activities <strong>of</strong> <strong>the</strong> <strong>IEA</strong>” [See <strong>IEA</strong>/GB(92)18/FINAL] and <strong>the</strong> Executive<br />
Director’s Introduction to this subject [Annex to <strong>IEA</strong>/GB(92)25]. <strong>The</strong><br />
preparation <strong>of</strong> this Secretariat document was one <strong>of</strong> <strong>the</strong> outcomes <strong>of</strong> an<br />
informal “<strong>IEA</strong> brainstorming session” held in Rueil-Malmaison outside <strong>of</strong><br />
Paris in March 1992 on non-Member questions <strong>of</strong> current interest and<br />
concern. Even before that time it had become clear that familiar but farreaching<br />
changes in <strong>the</strong> world were bringing about significant changes <strong>of</strong><br />
emphasis in energy policies [<strong>IEA</strong>/GB(92)25, Annex]. As stated by <strong>the</strong><br />
Executive Director, such far-reaching changes included “globalisation <strong>of</strong><br />
energy markets, <strong>the</strong> evolving position <strong>of</strong> oil producers”, <strong>the</strong> increasing role<br />
<strong>of</strong> developing countries in energy demand, and “<strong>the</strong> political and economic<br />
changes in Central and Eastern Europe and <strong>the</strong> CIS, and, last but not least,<br />
<strong>the</strong> growing focus on <strong>the</strong> relationship between energy and environmental<br />
policies”. Accordingly, energy security concerns were refocused to recognize<br />
<strong>the</strong> growing importance <strong>of</strong> non-Member countries (NMCs), and this led in<br />
due course to <strong>the</strong> Board’s adoption, in May 1992 as an interim decision, <strong>of</strong><br />
new and elaborate “<strong>IEA</strong> General Policy Guidance” and “Guidelines for<br />
Areas <strong>of</strong> NMC Co-operation” and to <strong>the</strong> Board’s reconsideration <strong>of</strong> <strong>the</strong><br />
applicable mandates [See <strong>IEA</strong>/GB(92)18/FINAL].<br />
<strong>The</strong> General Policy Guidance called for increasing “energy security by<br />
initiating or enhancing relations with significant energy consumers and/or<br />
producers,” and it stated <strong>the</strong> need for a case-by-case system in <strong>the</strong> <strong>IEA</strong>’s<br />
approach to NMCs that would not limit co-operation solely to NMCs likely<br />
to become OECD Members. It recommended that NMC activities be funded<br />
within <strong>the</strong> <strong>IEA</strong> annual budget allocations, that special contributions for<br />
specific, unforeseen activities should continue pursuant to <strong>IEA</strong> rules, and it<br />
stated that <strong>the</strong> Executive Director would report to <strong>the</strong> Board as <strong>the</strong>se NMC<br />
activities were undertaken. <strong>The</strong> Guidelines contain mixed elements <strong>of</strong><br />
mandate and policy, including <strong>the</strong> following on NMC participation in<br />
meetings <strong>of</strong> <strong>IEA</strong> bodies:<br />
For an experimental period, <strong>the</strong> Standing Groups should decide<br />
on <strong>the</strong> level, frequency, and subjects <strong>of</strong> NMC participation,<br />
subject to <strong>the</strong> right <strong>of</strong> any Member country to refer such a<br />
decision to <strong>the</strong> Governing Board. However, participation by a<br />
new non-Member country would be a matter for Governing<br />
149
Board consideration. <strong>The</strong> NMC Committee should be regularly<br />
informed. Participation by NMCs in <strong>IEA</strong> meetings should be ad<br />
hoc and informal. NMCs do not participate in Governing Board<br />
or Budget Committee meetings, unless <strong>the</strong> Governing Board<br />
were to decide o<strong>the</strong>rwise. To <strong>the</strong> extent possible, <strong>the</strong> number <strong>of</strong><br />
NMCs invited to an <strong>IEA</strong> meeting should be kept to <strong>the</strong> minimum<br />
necessary to accomplish <strong>the</strong> purpose <strong>of</strong> <strong>the</strong> meeting [<strong>IEA</strong>/<br />
GB(92)18/FINAL, III. A].<br />
NMC participation in conferences, workshops etc. is also determined on an<br />
ad hoc basis. Invitations to participate or make presentations in those<br />
events are subject to <strong>the</strong> <strong>IEA</strong> rule [See <strong>IEA</strong>/GB(89)42, Item 4(a)] requiring<br />
prior approval by <strong>the</strong> Executive Director and by <strong>the</strong> Governing Board<br />
Chairman [<strong>IEA</strong>/GB(92)18/FINAL, III. B]. In <strong>the</strong> same Guidelines, <strong>the</strong>re<br />
are also provisions for energy reviews <strong>of</strong> NMCs when such reviews are<br />
included in <strong>the</strong> Programme <strong>of</strong> Work or authorized by <strong>the</strong> Board. Fur<strong>the</strong>r,<br />
<strong>the</strong> Board authorized NMC “Associate” participation in <strong>IEA</strong> R & D<br />
Implementing Agreements [See <strong>IEA</strong>/GB(91)79, Item 5(f)], and <strong>the</strong> Board<br />
provided for intensified statistical services with exchanges on a quid pro quo<br />
basis when possible, but not for NMC participation in <strong>the</strong> <strong>IEA</strong> emergency<br />
response systems or for <strong>IEA</strong> training as a general rule [<strong>The</strong> foregoing<br />
actions were adopted by <strong>the</strong> Governing Board in reference to Parts II and III<br />
<strong>of</strong> <strong>IEA</strong>/GB(92)18/FINAL where <strong>the</strong> full texts are to be found; <strong>the</strong> Board’s<br />
Conclusions <strong>of</strong> May 1992 on those Parts are set forth in <strong>IEA</strong>/GB(92)25,<br />
Item 5(a) and (b)].<br />
At that meeting <strong>the</strong> Governing Board also made two fur<strong>the</strong>r decisions<br />
on <strong>the</strong> mandate <strong>of</strong> <strong>the</strong> Committee on Non-Member Countries<br />
[<strong>IEA</strong>/GB(92)25, Item 5(d)]:<br />
(i) <strong>The</strong> Committee on Non-Member Countries shall, taking<br />
into account <strong>the</strong> views <strong>of</strong> <strong>the</strong> Standing Groups and <strong>the</strong><br />
o<strong>the</strong>r committees <strong>of</strong> <strong>the</strong> Agency, advise <strong>the</strong> Secretariat and<br />
advise <strong>the</strong> Standing Groups and o<strong>the</strong>r committees <strong>of</strong> <strong>the</strong><br />
Agency with regard to non-Member country activities;<br />
(ii) overall policy guidance and decisions shall continue to be<br />
<strong>the</strong> responsibility <strong>of</strong> <strong>the</strong> Governing Board.<br />
In paragraph (e) <strong>of</strong> <strong>the</strong>se Conclusions <strong>the</strong> Board requested <strong>the</strong> NMC<br />
Committee to ensure that information on <strong>the</strong> Agency’s activities in this<br />
sector is communicated to Members and that Members’ views are<br />
150
communicated to <strong>the</strong> Secretariat. <strong>The</strong> NMC Committee is required to<br />
report regularly on this subject to <strong>the</strong> Board.<br />
Moreover, <strong>the</strong> Secretariat document <strong>IEA</strong>/GB(92)18/FINAL contained<br />
a Part IV entitled “Expanded Role <strong>of</strong> <strong>the</strong> NMC Committee”, in which it was<br />
recommended that <strong>the</strong> Committee’s role be expanded and that it should serve<br />
as a consultation point, entailing more frequent NMC Committee meetings<br />
and more functions. <strong>The</strong> NMC Committee would also receive more direct<br />
reporting <strong>of</strong> deliberations and recommendations from <strong>the</strong> o<strong>the</strong>r Standing<br />
Groups and Committees; <strong>the</strong> Delegates meeting in <strong>the</strong> Committee would<br />
need <strong>the</strong> authority <strong>of</strong> <strong>the</strong>ir governments to make decisions in order for this<br />
role <strong>of</strong> <strong>the</strong> Committee to be effective. <strong>The</strong> Committee would enjoy wider<br />
review and recommendation responsibilities, and report to <strong>the</strong> Board as<br />
appropriate. Although <strong>the</strong> Board at its May 1992 meeting did not reach final<br />
Conclusions on Part IV, it did note that <strong>the</strong> role <strong>of</strong> <strong>the</strong> Committee “needs to<br />
be fur<strong>the</strong>r developed over time, bearing in mind that specific areas <strong>of</strong> cooperation<br />
with non-Member countries must be integrated into <strong>the</strong> work <strong>of</strong><br />
<strong>the</strong> o<strong>the</strong>r Standing Groups” [<strong>IEA</strong>/GB(92)25, Item 5(c)]. Finally, in<br />
paragraph (f) <strong>of</strong> those Conclusions <strong>the</strong> Board “noted that this is an interim<br />
Decision, which <strong>the</strong> Governing Board will review in a future meeting.”<br />
3. Situation <strong>of</strong> <strong>the</strong> European Communities (European Union)<br />
In <strong>the</strong> wide range <strong>of</strong> <strong>IEA</strong> external relations, <strong>the</strong> European Communities<br />
have enjoyed a singular status and have fulfilled important responsibilities<br />
which must be considered in this discussion <strong>of</strong> <strong>the</strong> Agency’s relationships.<br />
As indicated above in Chapter III, Section I on <strong>the</strong> subject <strong>of</strong> possible<br />
accession by <strong>the</strong> European Communities to <strong>the</strong> I.E.P. Agreement, <strong>the</strong><br />
terminology “European Communities” (EC) and Commission <strong>of</strong> <strong>the</strong><br />
European Communities is retained in this work, notwithstanding <strong>the</strong><br />
coming into current usage <strong>of</strong> European Union (EU) following <strong>the</strong> entry into<br />
force <strong>of</strong> <strong>the</strong> Treaty on European Union. <strong>The</strong> reason for this retention <strong>of</strong> <strong>the</strong><br />
older terminology is that it is used in <strong>the</strong> I.E.P. Agreement [Article 72], in<br />
<strong>the</strong> OECD Council Decision [Article 3] and in o<strong>the</strong>r applicable <strong>IEA</strong> and<br />
OECD instruments.<br />
<strong>The</strong> European Communities were involved from <strong>the</strong> outset in <strong>the</strong><br />
development <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, particularly with <strong>the</strong> active participation <strong>of</strong> <strong>the</strong><br />
Commission <strong>of</strong> <strong>the</strong> European Communities in <strong>the</strong> Washington Energy<br />
Conference and <strong>the</strong> Energy Co-ordinating Group [See Chapter II, Sections<br />
C-2 and C-3 above]. <strong>The</strong> Commission took part in <strong>the</strong> work <strong>of</strong> <strong>the</strong> Agency<br />
immediately upon its establishment, and has continued to do so on a<br />
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systematic basis to <strong>the</strong> present day. At <strong>the</strong> time <strong>of</strong> this writing EC relations<br />
with <strong>the</strong> Agency fall into two distinct categories: (1) <strong>the</strong> current operational<br />
relations and (2) prospective changes which could be brought about by <strong>the</strong><br />
accession <strong>of</strong> <strong>the</strong> EC to <strong>the</strong> I.E.P. Agreement and by associated problems.<br />
<strong>The</strong> Commission has at all times co-operated with <strong>the</strong> <strong>IEA</strong> on <strong>the</strong> basis<br />
<strong>of</strong> Supplementary Protocol No. 1 to <strong>the</strong> OECD Convention which provides in<br />
effect for <strong>the</strong> Commission to “take part in <strong>the</strong> work” <strong>of</strong> <strong>the</strong> Organisation.<br />
That provision was considered applicable to <strong>the</strong> <strong>IEA</strong> as a result <strong>of</strong> <strong>the</strong><br />
establishment <strong>of</strong> <strong>the</strong> Agency within <strong>the</strong> framework <strong>of</strong> <strong>the</strong> OECD, and that<br />
was confirmed to <strong>the</strong> Commission by <strong>the</strong> letter <strong>of</strong> <strong>20</strong> November <strong>1974</strong> from<br />
Governing Board Chairman Davignon to <strong>the</strong> Commission President Ortoli<br />
which stated this:<br />
I have <strong>the</strong> honour to inform you that, after having discussed <strong>the</strong><br />
matter, <strong>the</strong> Governing Board <strong>of</strong> <strong>the</strong> Agency, referring to<br />
Supplementary Protocol No. 1 to <strong>the</strong> OECD Convention, which<br />
states that <strong>the</strong> Commission <strong>of</strong> <strong>the</strong> European Communities shall<br />
take part in <strong>the</strong> work <strong>of</strong> <strong>the</strong> OECD, has instructed me to invite<br />
your Institution to take part from now on in <strong>the</strong> work <strong>of</strong> <strong>the</strong><br />
various bodies <strong>of</strong> <strong>the</strong> Agency.<br />
This invitation, <strong>of</strong> course, in no way commits <strong>the</strong> Community<br />
with regard to <strong>the</strong> decision that it may take on <strong>the</strong> basis <strong>of</strong><br />
Article 3 <strong>of</strong> <strong>the</strong> Decision establishing <strong>the</strong> Agency. This Article<br />
states that “This Decision will be open for accession by <strong>the</strong><br />
European Communities upon <strong>the</strong>ir accession to <strong>the</strong> Agreement<br />
in accordance with its terms”.<br />
[<strong>The</strong> Board’s request is recorded in <strong>IEA</strong>/GB(74)9(1st Revision), Item 14(b),<br />
and <strong>the</strong> full text <strong>of</strong> <strong>the</strong> letter appears in Annex III to that document.]<br />
In practical terms, this relationship with <strong>the</strong> <strong>IEA</strong> provides <strong>the</strong><br />
Commission with <strong>the</strong> right to have access to <strong>IEA</strong> meetings (in principle to<br />
meetings <strong>of</strong> all bodies <strong>of</strong> <strong>the</strong> Agency except where participation in restrictive<br />
bodies would not be appropriate), to receive regularly agendas and o<strong>the</strong>r<br />
documents distributed to <strong>IEA</strong> bodies, and to speak and make proposals, but<br />
not with <strong>the</strong> right to vote in those bodies. <strong>The</strong> Commission does not enjoy<br />
<strong>the</strong> power to prevent <strong>the</strong> Agency from taking actions wished by its<br />
Members, nor does it have any obligation to contribute financially to <strong>the</strong><br />
Budgets <strong>of</strong> <strong>the</strong> Agency, and in fact <strong>the</strong> Commission has not participated in<br />
financing <strong>the</strong> Agency’s expenses. <strong>The</strong> Commission could <strong>the</strong>oretically<br />
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accede formally to selected Governing Board decisions, if so invited by <strong>the</strong><br />
Board, but this has not been done, although <strong>the</strong> Commission has<br />
participated informally in a number <strong>of</strong> Board actions. <strong>The</strong> Commission’s<br />
relationship to <strong>the</strong> Agency is thus tantamount to that <strong>of</strong> an “active<br />
observer”, although <strong>the</strong> <strong>of</strong>ficial texts do not use that expression.<br />
Under <strong>the</strong> foregoing arrangements <strong>the</strong> Commission has been<br />
regularly and actively engaged in <strong>the</strong> work <strong>of</strong> <strong>the</strong> Governing Board, <strong>the</strong><br />
Standing Groups, Committees and sub-groups <strong>of</strong> <strong>the</strong> Agency, and notably<br />
in a number <strong>of</strong> specific activities. In <strong>the</strong> oil emergency sector, for<br />
example, <strong>the</strong> <strong>IEA</strong> and <strong>the</strong> Commission have co-operated to ensure that<br />
an appropriate interface is made between <strong>the</strong> <strong>IEA</strong> Emergency Sharing<br />
System and <strong>the</strong> sharing phase <strong>of</strong> <strong>the</strong> EC oil emergency system [adopted<br />
by <strong>the</strong> Governing Board as an amendment to <strong>the</strong> <strong>IEA</strong> Emergency<br />
Management Manual, 4th Ed. 1982, Chapter C II, paragraph 10, p. 26;<br />
see <strong>IEA</strong>/GB(80)21, Item 10, p. 6; background material is contained in<br />
<strong>IEA</strong>/GB(80)27]. <strong>The</strong> Commission has issued Treaty <strong>of</strong> Rome<br />
competition clearance letters concerning <strong>the</strong> rules for co-operation <strong>of</strong> oil<br />
companies working with <strong>the</strong> Agency on oil emergency questions, and on<br />
12 December 1983 it issued a comprehensive “Decision relating to a<br />
proceeding under Article 85 <strong>of</strong> <strong>the</strong> EEC Treaty”, reproduced in<br />
<strong>IEA</strong>/SEQ(84)62 on that subject. At <strong>the</strong> time <strong>of</strong> this writing, <strong>the</strong><br />
extension <strong>of</strong> that Decision for a fur<strong>the</strong>r period <strong>of</strong> time is under active<br />
consideration.<br />
Moreover, <strong>the</strong> Commission (DG XVII or DG IV or both) has<br />
participated in <strong>the</strong> general preparatory work developing, refining and<br />
testing <strong>the</strong> Emergency Sharing System. Commission monitors have met<br />
regularly with <strong>the</strong> <strong>IEA</strong> Industry Advisory Board in its advisory functions<br />
with <strong>the</strong> Agency and <strong>the</strong>y have also participated in <strong>the</strong> Agency’s intensive<br />
tests <strong>of</strong> <strong>the</strong> System. Commission representatives also worked at length<br />
with <strong>the</strong> Secretariat and oil companies in <strong>the</strong> successful negotiation <strong>of</strong> <strong>the</strong><br />
<strong>IEA</strong> Dispute Settlement Centre Charter and Procedures for Arbitration<br />
[See <strong>IEA</strong>/GB(80)56, Item 8 and <strong>IEA</strong>/GB(81)75, Item 6, paragraphs<br />
(p)-(u)].<br />
On <strong>the</strong> operational side, <strong>the</strong> Commission has regularly been active in<br />
<strong>the</strong> Agency’s work on energy research and development, participating as a<br />
Contracting Party and as an Operating Agent in a number <strong>of</strong> energy R & D<br />
project Implementing Agreements. <strong>The</strong> Governing Board’s Guiding<br />
Principles for R and D Co-operation [Annex II to <strong>the</strong> Long-Term Cooperation<br />
Programme, <strong>IEA</strong>/GB(76)5, Item 2] provides in Article IV(c) that<br />
“<strong>The</strong> European Communities may take part in any programme or project<br />
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under <strong>the</strong> present Decision”. In consequence, <strong>the</strong> Commission (or o<strong>the</strong>r EC<br />
institution) has participated in some fourteen Implementing Agreements on<br />
a variety <strong>of</strong> subjects. Moreover, in a number <strong>of</strong> fusion Agreements <strong>the</strong><br />
Commission has served as <strong>the</strong> Operating Agent, with broad developmental,<br />
administrative and operational responsibilities for <strong>the</strong> overall project. Since<br />
each <strong>of</strong> <strong>the</strong> o<strong>the</strong>r Implementing Agreements contains a provision permitting<br />
<strong>the</strong> European Communities in effect to “participate in this Agreement in<br />
accordance with arrangements to be made by <strong>the</strong> Executive Committee,<br />
acting by unanimity”, access <strong>of</strong> <strong>the</strong> Communities to <strong>the</strong> projects and<br />
programmes established in those Agreements is also assured. In addition,<br />
<strong>the</strong> Commission has been active in all <strong>of</strong> <strong>the</strong> o<strong>the</strong>r sectors <strong>of</strong> <strong>the</strong> Agency’s<br />
work, e.g. in long-term co-operation, in <strong>the</strong> oil market, in <strong>IEA</strong> relations with<br />
non-Members and in statistics.<br />
<strong>The</strong> second aspect <strong>of</strong> EC participation in <strong>IEA</strong> affairs lies in <strong>the</strong><br />
power <strong>of</strong> <strong>the</strong> Communities to accede to <strong>the</strong> I.E.P. Agreement as provided in<br />
Article 72 <strong>of</strong> <strong>the</strong> Agreement:<br />
1. This Agreement shall be open for accession by <strong>the</strong><br />
European Communities.<br />
2. This Agreement shall not in any way impede <strong>the</strong> fur<strong>the</strong>r<br />
implementation <strong>of</strong> <strong>the</strong> treaties establishing <strong>the</strong> European<br />
Communities.<br />
Article 3 <strong>of</strong> <strong>the</strong> OECD Council Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
also provides for <strong>the</strong> right <strong>of</strong> <strong>the</strong> Communities to accede to that Decision.<br />
Accession to both instruments would be necessary to complete <strong>the</strong><br />
formalities.<br />
During <strong>the</strong> I.E.P. Agreement negotiations in Brussels <strong>the</strong> question <strong>of</strong><br />
a possible conflict between <strong>the</strong> I.E.P. Agreement and <strong>the</strong> Treaty <strong>of</strong> Rome<br />
was raised. Although no specific conflict was foreseen, Article 72 was<br />
included in <strong>the</strong> I.E.P. Agreement to reduce <strong>the</strong> risk <strong>of</strong> conflict and to keep<br />
to a minimum any potential EC opposition to <strong>the</strong> <strong>IEA</strong>, particularly if one<br />
or more EC Member States were not to participate in <strong>the</strong> Agency. At <strong>the</strong><br />
time when steps were being taken to establish <strong>the</strong> Agency, EC accession to<br />
<strong>the</strong> I.E.P. Agreement was not considered likely, but Article 72 was added<br />
to anticipate <strong>the</strong> possible convergence <strong>of</strong> energy policies <strong>of</strong> <strong>the</strong> EC<br />
Member States and <strong>the</strong>ir possible future representation in whole or in part<br />
by <strong>the</strong> Communities. <strong>The</strong> possible accession <strong>of</strong> <strong>the</strong> European<br />
Communities to <strong>the</strong> I.E.P. Agreement is considered fur<strong>the</strong>r in Chapter III,<br />
Section I above.<br />
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4. Capacity to Enter into International Agreements<br />
One <strong>of</strong> <strong>the</strong> most far-reaching means for an organization like <strong>the</strong> <strong>IEA</strong> to<br />
establish external relations is its conclusion <strong>of</strong> international agreements<br />
(which are treaties under international law) with Member or non-Member<br />
governments or o<strong>the</strong>r public international organizations. This has been a<br />
vital element for o<strong>the</strong>r organizations as well as for <strong>the</strong> <strong>IEA</strong> [See generally<br />
<strong>the</strong> Report <strong>of</strong> <strong>the</strong> International Law Commission on <strong>the</strong> Work <strong>of</strong> its Thirtyfourth<br />
Session, ORGA 34th Sess., Supp. No. 10 (A/37/10) on <strong>the</strong> Vienna<br />
Convention on <strong>the</strong> Law <strong>of</strong> Treaties Between States and International<br />
Organizations or Between International Organizations”, and particularly <strong>the</strong><br />
commentary on Article 6 entitled “Capacity <strong>of</strong> international organizations<br />
to conclude treaties”].<br />
In <strong>the</strong> case <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, <strong>the</strong> international agreement power has been<br />
employed to enable <strong>the</strong> Agency, quite independently <strong>of</strong> <strong>the</strong> OECD, to make<br />
<strong>the</strong> complex arrangements for <strong>the</strong> participation <strong>of</strong> Norway in <strong>the</strong> work <strong>of</strong><br />
<strong>the</strong> Agency. Under those arrangements, most <strong>of</strong> <strong>the</strong> elements <strong>of</strong> <strong>IEA</strong><br />
membership became applicable to Norway, while <strong>the</strong> special situation <strong>of</strong><br />
Norway could be given institutional and legal recognition to <strong>the</strong> satisfaction<br />
<strong>of</strong> both Norway and <strong>the</strong> Agency. <strong>The</strong> mutual commitments could be taken<br />
in a legally binding way in much <strong>the</strong> same fashion that <strong>IEA</strong> Members took<br />
commitments under <strong>the</strong> I.E.P. Agreement. In <strong>the</strong> future, this power <strong>of</strong> <strong>the</strong><br />
Agency to enter into international agreements may well become even more<br />
important, in that it may facilitate possible relationships with non-Member<br />
countries, with o<strong>the</strong>r public international organizations and with o<strong>the</strong>r<br />
entities.<br />
<strong>The</strong> international agreement (or “treaty”) power <strong>of</strong> international<br />
organizations is specifically recognized in Article 6 <strong>of</strong> <strong>the</strong> Vienna<br />
Convention on international organization treaties, cited above (while that<br />
Convention had not entered into force at <strong>the</strong> time <strong>of</strong> this writing, it is<br />
expected to do so in due time, and in any case Article 6 may be considered<br />
to state a customary rule <strong>of</strong> law fully effective without <strong>the</strong> Vienna<br />
Convention). Article 6 provides that “<strong>The</strong> capacity <strong>of</strong> an international<br />
organization to conclude treaties is governed by <strong>the</strong> rules <strong>of</strong> that<br />
organization”. Article 2.1(j) <strong>of</strong> that Convention defines “rules <strong>of</strong> <strong>the</strong><br />
organization” to mean “in particular, <strong>the</strong> constituent instruments, decisions<br />
and resolutions adopted in accordance with <strong>the</strong>m, and established practice<br />
<strong>of</strong> <strong>the</strong> organization”. In <strong>the</strong> case <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, <strong>the</strong> international organization<br />
treaty power is supported by all <strong>of</strong> those elements, i.e. by <strong>the</strong> constituent<br />
instrument (<strong>the</strong> I.E.P. Agreement), by decisions <strong>of</strong> <strong>the</strong> Governing Board and<br />
by <strong>the</strong> established practice <strong>of</strong> <strong>the</strong> Agency.<br />
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<strong>The</strong> I.E.P. Agreement provision governing <strong>the</strong>se relationships is<br />
Article 63, quoted fully above in Section D-1. “In order to achieve <strong>the</strong><br />
objectives <strong>of</strong> <strong>the</strong> Program”, Article 63 authorizes <strong>the</strong> Agency to “establish<br />
appropriate relations” with, inter alia, non-participating countries and<br />
governmental international organizations, which are enabled by international<br />
law to enter into international agreements. <strong>IEA</strong> authority extends<br />
to <strong>the</strong> making <strong>of</strong> international agreements in <strong>the</strong> name <strong>of</strong> <strong>the</strong> Agency when,<br />
in <strong>the</strong> view <strong>of</strong> <strong>the</strong> Governing Board, that would be an “appropriate”<br />
relation. In <strong>the</strong> case <strong>of</strong> Norway, <strong>the</strong> Governing Board implicitly made that<br />
characterization when it authorized <strong>the</strong> Chairman <strong>of</strong> <strong>the</strong> Governing Board<br />
and <strong>the</strong> Executive Director to sign <strong>the</strong> Agreement with <strong>the</strong> Government <strong>of</strong><br />
Norway on behalf <strong>of</strong> <strong>the</strong> Agency [<strong>IEA</strong>/GB(75)8, Item 4(c)]. That<br />
authorization was immediately acted upon <strong>the</strong> same day it was granted, and<br />
in effect it was confirmed by <strong>the</strong> Board when it adopted implementing<br />
measures at its next meeting [<strong>IEA</strong>/GB(75)15, Item 10(a)]. <strong>The</strong>reafter <strong>the</strong><br />
Agency consistently applied <strong>the</strong> Agreement with Norway in accordance with<br />
its terms, and <strong>the</strong>reby it has continuously reconfirmed <strong>the</strong> decision to enter<br />
into <strong>the</strong> international agreement.<br />
<strong>The</strong> <strong>IEA</strong> also develops and administers <strong>the</strong> energy R & D Implementing<br />
Agreements, which have numbered about sixty in <strong>the</strong> course <strong>of</strong> <strong>the</strong><br />
Agency’s first twenty years. Although <strong>the</strong> Agency is not a formal party to<br />
those international agreements (because <strong>the</strong>y are decentralized, and <strong>the</strong><br />
Agency can fulfill its functions for <strong>the</strong>m without becoming a formal party),<br />
<strong>the</strong> Agency is integrated into <strong>the</strong> process <strong>of</strong> <strong>the</strong> management as well as<br />
initiation and development <strong>of</strong> <strong>the</strong>m, with continuing political, operational<br />
and depositary responsibilities. Possible participation by <strong>the</strong> Agency itself<br />
as a formal Contracting Party in Implementing Agreements has been<br />
considered, but so far this has not been deemed necessary for programme<br />
purposes. In <strong>the</strong> meantime, however, participation by <strong>the</strong> Agency as a<br />
Contracting Party has not been excluded, and it could be carried out if it<br />
were found necessary or desirable from a programme standpoint.<br />
<strong>The</strong> history <strong>of</strong> <strong>the</strong> Agency thus confirms <strong>the</strong> authority conferred upon<br />
<strong>the</strong> Agency by <strong>the</strong> I.E.P. Agreement for <strong>the</strong> <strong>IEA</strong> to enter into international<br />
agreements when, as provided in Article 63, this is done “In order to<br />
achieve <strong>the</strong> objectives <strong>of</strong> <strong>the</strong> Program” <strong>of</strong> <strong>the</strong> Agency.<br />
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CHAPTER V<br />
Internal Structure <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
This Chapter begins a systematic examination <strong>of</strong> <strong>the</strong> internal structure,<br />
procedures and related aspects <strong>of</strong> <strong>the</strong> <strong>IEA</strong>. It takes up <strong>the</strong> main <strong>IEA</strong><br />
organs, beginning with <strong>the</strong> Governing Board, <strong>the</strong> Agency’s supreme<br />
institutional organ. It continues with <strong>the</strong> Standing Groups and Committees,<br />
all viewed from a structural and procedural standpoint.<br />
A. <strong>The</strong> Governing Board<br />
1. Function and Competence<br />
<strong>The</strong> Governing Board is <strong>the</strong> supreme institutional organ <strong>of</strong> <strong>the</strong> International<br />
Energy Agency. As stated in Article 4 <strong>of</strong> <strong>the</strong> OECD Council Decision on <strong>the</strong><br />
Establishment <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong> Governing Board “. . . shall be <strong>the</strong> body<br />
from which all acts <strong>of</strong> <strong>the</strong> Agency derive”. Although <strong>the</strong> I.E.P. Agreement<br />
does not formulate <strong>the</strong> Board’s functions in those exact terms, <strong>the</strong> specific<br />
grants <strong>of</strong> power made to <strong>the</strong> Board in <strong>the</strong> Agreement, considered in <strong>the</strong><br />
aggregate, lead to <strong>the</strong> same general conclusion. <strong>The</strong> Governing Board has<br />
<strong>the</strong> last word on matters <strong>of</strong> Agency policy, <strong>the</strong> commitments <strong>of</strong> Member<br />
countries made under <strong>IEA</strong> auspices, <strong>the</strong> internal organization and <strong>the</strong><br />
operations <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong> admission <strong>of</strong> new Members and external<br />
relations. <strong>The</strong> Board appoints <strong>the</strong> Executive Director and adopts <strong>the</strong> annual<br />
Programmes <strong>of</strong> Work and Budgets <strong>of</strong> <strong>the</strong> Agency. It provides <strong>the</strong><br />
institutional mechanism for <strong>the</strong> convergence <strong>of</strong> Members’ energy policies,<br />
and for Members to reach agreements on energy policy, to exchange views,<br />
to establish co-operative activities and projects and to take formal<br />
international commitments in <strong>the</strong> energy sector. Viewed from within <strong>the</strong><br />
Agency, <strong>the</strong> Governing Board is <strong>the</strong> source <strong>of</strong> ultimate authority for <strong>the</strong><br />
activities <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong> Standing Groups, <strong>the</strong> Committees and <strong>the</strong><br />
Secretariat. Toge<strong>the</strong>r with <strong>the</strong> Executive Director, <strong>the</strong> Board provides <strong>the</strong><br />
157
highest <strong>IEA</strong> leadership and direction. <strong>The</strong> Board also constitutes <strong>the</strong><br />
regular meeting place for Ministers and o<strong>the</strong>r high level <strong>of</strong>ficials with energy<br />
policy decision responsibilities, and is seen in <strong>the</strong> energy policy world as <strong>the</strong><br />
most convincing and effective platform for propagation <strong>of</strong> <strong>the</strong> energy policy<br />
views <strong>of</strong> <strong>the</strong> Member countries <strong>of</strong> <strong>the</strong> Agency. <strong>The</strong> more particular<br />
functions <strong>of</strong> <strong>the</strong> Governing Board will emerge from <strong>the</strong> detailed examination<br />
<strong>of</strong> <strong>the</strong> Board’s competence and operations which follows.<br />
<strong>The</strong> competence <strong>of</strong> <strong>the</strong> Governing Board is stated in two different<br />
fashions in <strong>the</strong> I.E.P. Agreement, broadly in comprehensive grants <strong>of</strong> power<br />
and specifically in respect to many particular questions. <strong>The</strong> broad<br />
provisions are contained principally in Articles 50-51, as follows:<br />
Article 51.1<br />
<strong>The</strong> Governing Board shall adopt decisions and recommendations<br />
which are necessary for <strong>the</strong> proper functioning <strong>of</strong> <strong>the</strong> Program.<br />
Article 51.2<br />
<strong>The</strong> Governing Board shall review periodically and take appropriate<br />
action concerning developments in <strong>the</strong> international energy<br />
situation, including problems relating to <strong>the</strong> oil supplies <strong>of</strong> any<br />
Participating Country or Countries, and <strong>the</strong> economic and monetary<br />
implications <strong>of</strong> <strong>the</strong>se developments. In its activities concerning<br />
<strong>the</strong> economic and monetary implications <strong>of</strong> developments in <strong>the</strong><br />
international energy situation, <strong>the</strong> Governing Board shall take into<br />
account <strong>the</strong> competence and activities <strong>of</strong> international institutions<br />
responsible for overall economic and monetary questions.<br />
Competence to make binding decisions is specifically provided in Article<br />
52.1, and <strong>the</strong> non-binding effect <strong>of</strong> recommendations is stated in Article<br />
52.2. <strong>The</strong> Board’s competence to “establish any o<strong>the</strong>r organ necessary for<br />
<strong>the</strong> implementation <strong>of</strong> <strong>the</strong> Program” is found in Article 49.2. Power to<br />
adopt rules <strong>of</strong> procedure for itself and subordinate bodies is provided in<br />
Article 50.2, while power to elect its Chairman and Vice-Chairmen appears<br />
in Article 50.3, and <strong>the</strong> power to delegate any <strong>of</strong> its functions to o<strong>the</strong>r<br />
organs, in Article 51.3.<br />
More or less parallel provisions are found in <strong>the</strong> Council Decision, in<br />
Articles 4 and 5 on general competence: <strong>the</strong> Governing Board is to be “<strong>the</strong><br />
body from which all acts <strong>of</strong> <strong>the</strong> Agency derive”, and it has <strong>the</strong> power to<br />
158
make recommendations and binding decisions, to delegate its powers to<br />
o<strong>the</strong>r organs, to adopt its own rules <strong>of</strong> procedure and voting rules, and to<br />
“establish such organs and procedures as may be required for <strong>the</strong> proper<br />
functioning <strong>of</strong> <strong>the</strong> Agency”. Article 6(a) provides that<br />
<strong>The</strong> Governing Board shall decide upon and carry out an<br />
International Energy Program for co-operation in <strong>the</strong> field <strong>of</strong><br />
energy, <strong>the</strong> aims <strong>of</strong> which are: . . . (in sum, emergency selfsufficiency<br />
in oil supplies, demand restraint measures, emergency<br />
oil allocation, an information system on <strong>the</strong> international oil<br />
market, long-term co-operation and consumer/producer relations).<br />
<strong>The</strong>n <strong>the</strong>re follows a statement <strong>of</strong> general power, framed in terms different<br />
from those appearing in <strong>the</strong> I.E.P. Agreement. At <strong>the</strong> end <strong>of</strong> Council<br />
Decision Article 6(a) <strong>the</strong> following appears:<br />
<strong>The</strong> Governing Board may adopt o<strong>the</strong>r measures <strong>of</strong> co-operation<br />
in <strong>the</strong> energy field which it may deem necessary and o<strong>the</strong>rwise<br />
amend <strong>the</strong> Program by unanimity, taking into account <strong>the</strong><br />
constitutional procedures <strong>of</strong> <strong>the</strong> Participating Countries.<br />
In addition <strong>the</strong> I.E.P. Agreement contains many specific directions to <strong>the</strong><br />
Governing Board, which carry with <strong>the</strong>m <strong>the</strong> corresponding competence in a<br />
wide variety <strong>of</strong> subjects. <strong>The</strong> leading specific I.E.P. provisions include <strong>the</strong><br />
following:<br />
Raising <strong>the</strong> stock commitment to 90 days Article 2.2<br />
Elements <strong>of</strong> stock commitment Article 3.2<br />
Recommendations on effectiveness <strong>of</strong> Article 4.2<br />
stock measures<br />
Recommendations on demand restraint Article 5.3<br />
Recommendations on countries’ measures Article 6.3<br />
for allocation and <strong>the</strong>ir effectiveness<br />
Decisions on practical procedures for oil Article 6.4<br />
allocation and participation <strong>of</strong> oil companies<br />
Decisions on <strong>the</strong> group’s share <strong>of</strong> world oil Article 11.2<br />
supply, historical patterns, etc.<br />
Decisions on “base period” questions Article 18.2<br />
Decisions on activation <strong>of</strong> <strong>the</strong> oil Sharing System Article 19.3<br />
Decisions on measures to meet <strong>the</strong> situation Article <strong>20</strong>.3<br />
<strong>of</strong> stock draw down obligation reaching 50%<br />
159
Decisions on emergency findings Article 21.4<br />
Decisions on o<strong>the</strong>r emergency measures Article 22<br />
Decisions on deactivation Articles 23 and 24<br />
Decisions on <strong>the</strong> General Section <strong>of</strong><br />
Articles 27.1(j),<br />
<strong>the</strong> Information System 29.2 and 31.2<br />
Decisions on <strong>the</strong> Special (Emergency) Section Articles 34.2<br />
<strong>of</strong> <strong>the</strong> Information System and 36<br />
Decisions on procedures for consultations Article 37.3<br />
with oil companies<br />
Decisions on <strong>the</strong> long-term co-operation Article 43.1<br />
Decisions on producer/consumer relations Article 48.2<br />
Appointment <strong>of</strong> <strong>the</strong> Executive Director Article 59.2<br />
Decisions on <strong>the</strong> Secretariat Article 59.4<br />
Voting Article 61.2<br />
Relations with o<strong>the</strong>r entities, etc. Article 63<br />
Adoption <strong>of</strong> scales <strong>of</strong> contributions Article 64.1<br />
Decisions changing principles and rules Article 64.1<br />
for scales <strong>of</strong> contributions<br />
Decisions on financial administration Article 64.4<br />
Termination <strong>of</strong> <strong>the</strong> I.E.P. Agreement Article 69<br />
Decisions on accession to <strong>the</strong> I.E.P. Agreement Article 71<br />
Amendments <strong>of</strong> <strong>the</strong> I.E.P. Agreement Article 73<br />
Decisions on I.E.P. Agreement Annex questions Annex, Article 9<br />
Questions <strong>of</strong> competence have seldom arisen during <strong>the</strong> operations <strong>of</strong> <strong>the</strong><br />
<strong>IEA</strong>, doubtless because <strong>the</strong> general grants <strong>of</strong> power are quite comprehensive<br />
in scope, and <strong>the</strong> Board has wished to avoid having its deliberations<br />
diverted from questions <strong>of</strong> substance. In a few cases <strong>the</strong> specific grants <strong>of</strong><br />
power with time limits have given rise to discussion about <strong>the</strong> extent <strong>of</strong><br />
Governing Board power after <strong>the</strong> time limit has passed, for example in <strong>the</strong><br />
case <strong>of</strong> <strong>the</strong> numerous 1 July 1975 I.E.P. deadlines for action on measures<br />
which could not be completed during <strong>the</strong> Brussels negotiations on <strong>the</strong> I.E.P.<br />
Agreement. One example <strong>of</strong> that problem which gave rise to discussion in<br />
<strong>IEA</strong> bodies was <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> Base Period Final Consumption decision<br />
foreseen in Article 18.2 to be adopted not later than 1 July 1975. <strong>The</strong> <strong>IEA</strong>’s<br />
Legal Counsel gave an opinion to <strong>the</strong> effect that this date was not meant to<br />
contain a limitation <strong>of</strong> power but was intended ra<strong>the</strong>r as a target to<br />
stimulate rapid action. Thus <strong>the</strong> Legal Counsel’s opinion stated that with<br />
respect to <strong>the</strong> 1 July 1975 date in <strong>the</strong> Agreement, in this case “It was<br />
adopted, in view <strong>of</strong> <strong>the</strong> perceived urgency in <strong>1974</strong>, more as an indicative<br />
160
target than a period for lapse <strong>of</strong> authority” [See opinion annexed to<br />
<strong>IEA</strong>/GB(80)9]. This important conclusion seemed to be accepted by most<br />
<strong>of</strong> <strong>the</strong> Board (and had been so accepted in <strong>the</strong> Standing Group on<br />
Emergency Questions), but in <strong>the</strong> end Article 22 was employed to reach <strong>the</strong><br />
same result in <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> Base Period proposal in 1980, well after<br />
<strong>the</strong> lapse <strong>of</strong> <strong>the</strong> 1975 deadline [See <strong>IEA</strong>/GB(80)21, Item 10]. After <strong>the</strong><br />
deadline had passed, authority for <strong>the</strong> action to be taken could be found, as<br />
in <strong>the</strong> case cited, in o<strong>the</strong>r authorities contained in <strong>the</strong> I.E.P. Agreement. In<br />
o<strong>the</strong>r cases when <strong>the</strong> Board had taken an initial decision before <strong>the</strong><br />
deadline, <strong>the</strong> Board has acted after <strong>the</strong> deadline has expired to modify or<br />
complete <strong>the</strong> decision. Sometimes <strong>the</strong> Board has acted after <strong>the</strong> deadline<br />
without specifying <strong>the</strong> authority on which <strong>the</strong> action was based, in effect<br />
treating <strong>the</strong> deadlines as indicative and not as a time limit on competence<br />
[See <strong>the</strong> decision adopting <strong>the</strong> Long-Term Co-operation Programme<br />
<strong>IEA</strong>/GB(76)5, Item 2]. This flexibility has been applied to permit <strong>the</strong> <strong>IEA</strong><br />
to act in cases which might o<strong>the</strong>rwise require <strong>the</strong> Board to employ <strong>the</strong> heavy<br />
procedure for amending <strong>the</strong> I.E.P. Agreement, which <strong>the</strong> Board has never<br />
had to do in such circumstances.<br />
2. Composition<br />
As <strong>the</strong> highest ranking body <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, <strong>the</strong> Governing Board is composed <strong>of</strong><br />
“one or more ministers or <strong>the</strong>ir delegates from each Participating Country”,<br />
in accordance with Article 50.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement. Norway also<br />
participates in <strong>the</strong> Governing Board pursuant to Article 4 <strong>of</strong> <strong>the</strong> Agreement<br />
with Norway and <strong>the</strong> Decision on Institutional Arrangements for <strong>the</strong><br />
Participation <strong>of</strong> Norway [<strong>the</strong> arrangements with Norway are discussed in<br />
detail in Chapter IV, Section A-3 above]. In practice <strong>the</strong> Board is considered<br />
to be composed <strong>of</strong> <strong>IEA</strong> Member countries and Norway, and not individual<br />
representatives [Article 4 <strong>of</strong> <strong>the</strong> Council Decision thus provides for “A<br />
Governing Board composed <strong>of</strong> all <strong>the</strong> Participating Countries. . .” Emphasis<br />
added]. This is in keeping with <strong>the</strong> broad and unusual powers conferred<br />
upon <strong>the</strong> Governing Board by <strong>the</strong> I.E.P. Agreement, powers over oil supply<br />
shortfalls and Members’ energy policies generally, and with <strong>the</strong> Board’s<br />
power to make decisions which are legally binding on Member countries.<br />
Accordingly, <strong>the</strong> Board speaks for <strong>the</strong> Members ra<strong>the</strong>r than for <strong>the</strong> individual<br />
representatives; decisions are binding upon states ra<strong>the</strong>r than upon <strong>the</strong><br />
participating individual representatives. In consequence, Members’ representatives<br />
change, sometimes from meeting to meeting, but <strong>the</strong> membership<br />
161
<strong>of</strong> <strong>the</strong> country remains constant. New Members immediately become<br />
members <strong>of</strong> <strong>the</strong> Governing Board as a legal result <strong>of</strong> <strong>the</strong>ir accession to <strong>the</strong><br />
I.E.P. Agreement.<br />
3. Meetings at Ministerial and Official Levels<br />
Article 50.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement provides that <strong>the</strong> Board shall be<br />
composed <strong>of</strong> “one or more ministers or <strong>the</strong>ir delegates” [Emphasis added].<br />
At <strong>the</strong> outset <strong>the</strong> Board was expected to meet less frequently than has<br />
proved to be <strong>the</strong> case, and <strong>the</strong> more or less routine work at Board level was<br />
to be carried out by <strong>the</strong> Management Committee. However, it was soon<br />
apparent that <strong>the</strong> Board would have to meet quite frequently, at <strong>the</strong> rate <strong>of</strong><br />
about one meeting every month during <strong>the</strong> first year or so, and that <strong>the</strong><br />
Management Committee’s work would in fact have to be carried out by <strong>the</strong><br />
Board itself meeting at <strong>the</strong> level <strong>of</strong> high <strong>of</strong>ficials ra<strong>the</strong>r than Ministers [This<br />
distinction in meeting level is developed fur<strong>the</strong>r in Section 7 below].<br />
As a consequence, Ministerial Level meetings were to be convened<br />
only on occasion <strong>of</strong> special events, such as an oil supply disruption (<strong>the</strong><br />
Iranian Revolution and Iran-Iraq War period 1979-1981), <strong>the</strong> adoption <strong>of</strong><br />
major policy decisions or <strong>the</strong> need to give significant new directions to <strong>the</strong><br />
Agency’s work. In each case <strong>the</strong> Board at <strong>of</strong>ficial level has made <strong>the</strong><br />
decision whe<strong>the</strong>r or not to convene <strong>the</strong> Board at Ministerial Level [See for<br />
example <strong>the</strong> convening <strong>of</strong> <strong>the</strong> 1993 Ministerial, <strong>IEA</strong>/GB(92)45, Item 8].<br />
At <strong>the</strong> fourteen Ministerial meetings convened up to <strong>1994</strong>, virtually<br />
all Members were represented by Ministers, usually from Ministries or<br />
government departments responsible for energy, foreign affairs, economics<br />
or industry, and sometimes by two or more Ministers from those sectors. In<br />
addition to Ministers, delegations to those meetings usually included, <strong>the</strong><br />
high <strong>of</strong>ficials from capitals who ordinarily represented <strong>the</strong> Member at<br />
<strong>of</strong>ficial level meetings and members <strong>of</strong> <strong>the</strong> OECD Delegation, usually <strong>the</strong><br />
Permanent Delegates and <strong>the</strong> Energy Advisors.<br />
At Ministerial Level meetings <strong>the</strong> Governing Board has taken a number<br />
<strong>of</strong> particularly significant actions on policy, legislative or institutional<br />
questions which were prepared by <strong>the</strong> Governing Board at <strong>of</strong>ficial level and<br />
were ripe for decision by Ministers. Those actions included <strong>the</strong> following:<br />
■<br />
1977 Decision on Group Objectives and Principles for Energy<br />
Policy, providing for an upper limit on oil imports <strong>of</strong> <strong>the</strong> Group in<br />
1985 and for comprehensive Principles for Energy Policy<br />
[<strong>IEA</strong>/GB(77)52(1st Revision), Item 2(c), and Annex].<br />
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1979 Decision Confirming <strong>the</strong> Board’s Action on <strong>the</strong> Oil Market<br />
Situation in 1979, on <strong>the</strong> reduction <strong>of</strong> <strong>IEA</strong> oil demand by 2 million<br />
barrels per day (about 5 per cent <strong>of</strong> oil consumption), and <strong>the</strong> extension<br />
<strong>of</strong> that decision into 1980 [<strong>IEA</strong>/GB(79)32, Item 3(d) and (f)].<br />
1979 Decision Adopting <strong>the</strong> Principles for <strong>IEA</strong> Action on Coal, in<br />
order to promote coal production, use and trade as a means <strong>of</strong><br />
reducing dependence on oil [<strong>IEA</strong>/GB(79)32, Item 4 and Annex I].<br />
1979 Decision on 1980 Targets and 1985 Goals, including policy<br />
action to restrain demand in 1980, to limit Members’ respective oil<br />
imports to meet specific 1980 Targets and 1985 Goals [<strong>IEA</strong>/GB(80)2,<br />
Item 3 and Annex I].<br />
1980 Arrangements for Yardsticks and Ceilings and Decision on<br />
Adjustment <strong>of</strong> Yardsticks and Ceilings, in order to monitor<br />
progress and to adjust ceilings and goals [<strong>IEA</strong>/GB(80)49, Item 3(a)<br />
and Annex II].<br />
1980 Decision on Consultations on Stock Policies, in order to<br />
streng<strong>the</strong>n measures for dealing with short-term market disruptions<br />
[<strong>IEA</strong>/GB(80)49, Item 3(a) (iii) and Annex III].<br />
1980 Measures on Draw <strong>of</strong> Stocks and Discouragement <strong>of</strong><br />
Undesirable Purchases <strong>of</strong> Oil and Decision by <strong>the</strong> Governing<br />
Board for Correcting Imbalances, with estimate <strong>of</strong> total demand<br />
reduction and commitment <strong>of</strong> all <strong>IEA</strong> countries to contribute to carrying<br />
out <strong>the</strong> measures [<strong>IEA</strong>/GB(80)97, Item 2(g) to (m) and Annex I].<br />
1980 Lines <strong>of</strong> Action for Energy Conservation and Fuel<br />
Switching, setting forth <strong>the</strong> necessary actions for energy demand<br />
management [<strong>IEA</strong>/GB(80)97, Item 4(b) and Annex II].<br />
1983 Agreement on Obtaining Gas Supplies from Secure<br />
Sources, on avoidance <strong>of</strong> undue dependence on any single source <strong>of</strong><br />
gas imports and to obtain future gas supplies from secure sources<br />
[<strong>IEA</strong>/GB(83)35 (1st Revision) paragraph 9].<br />
1985 Conclusions on Conservation, identifying types <strong>of</strong> desirable<br />
actions to assist in achieving greater energy efficiency [<strong>IEA</strong>/GB(85)46,<br />
Annex I, Chapter I].<br />
1985 Recommendation on Energy and <strong>the</strong> Environment,<br />
establishing lines <strong>of</strong> action to advance objectives <strong>of</strong> both energy and<br />
environmental policy [<strong>IEA</strong>/GB(85)46, Annex I, Chapter III].<br />
1987 Decision on Maintenance <strong>of</strong> Stock Levels, concerning levels<br />
<strong>of</strong> oil stocks to be made readily available to governments [<strong>IEA</strong>/<br />
GB(87)33, Annex, paragraphs 17-23; see also <strong>IEA</strong>/GB(89)36, Annex,<br />
paragraph 4(a)].<br />
163
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1989 <strong>IEA</strong> Ministerial Pledge on <strong>the</strong> Environment, including <strong>the</strong><br />
commitment to pursue in Ministers’ respective policies a number <strong>of</strong><br />
stated environmental considerations [<strong>IEA</strong>/GB(89)36, Item 2(b) and<br />
Annex, paragraph 4(d)].<br />
1991 Ministerial Recommendation on Emergency Oil Stocks, on<br />
government control <strong>of</strong> emergency industry oil stocks and/or <strong>the</strong> increase<br />
<strong>of</strong> government owned or controlled stocks, on <strong>the</strong> <strong>IEA</strong> stock commitment<br />
and on exceeding <strong>the</strong> commitment [<strong>IEA</strong>/GB(91)46, Annex, paragraph 6].<br />
1993 Ministerial Action on Shared Goals, a statement <strong>of</strong> <strong>the</strong> shared<br />
goals that will provide a basis for <strong>IEA</strong> Members to develop <strong>the</strong>ir energy<br />
policies [<strong>IEA</strong>/GB(93)43, Item 3(a) and Annex].<br />
<strong>The</strong>se are examples <strong>of</strong> <strong>the</strong> types and significance <strong>of</strong> policy and legislative<br />
action taken in Ministerial Level meetings. Most frequently Ministers make, as<br />
might be expected, policy statements which are set out in <strong>the</strong> Communiqués or<br />
Conclusion documents. Typically, Ministers assess <strong>the</strong> short and medium energy<br />
market situation with particular attention to sectors requiring special policy<br />
actions at that time. Ministers also review <strong>the</strong> work <strong>of</strong> <strong>the</strong> Governing Board at<br />
<strong>of</strong>ficial level and assess <strong>the</strong> performance <strong>of</strong> Member countries in meeting <strong>the</strong>ir<br />
political and, when appropriate, legal commitments under <strong>the</strong> <strong>IEA</strong> system. Often<br />
Ministers review energy policy concepts about to enter <strong>the</strong> Agency’s programmes,<br />
and give impetus to future policies, programmes and priorities for <strong>IEA</strong> activities.<br />
Much <strong>of</strong> this is preliminary in character, leading to Secretariat analysis,<br />
consideration by <strong>the</strong> appropriate Standing Groups and finally submission <strong>of</strong><br />
proposals to <strong>the</strong> Governing Board, ei<strong>the</strong>r at Ministerial or at <strong>of</strong>ficial level, to<br />
take actions which have direct policy, legislative or institutional impact.<br />
As might be expected, <strong>the</strong> Governing Board meets more frequently at<br />
<strong>of</strong>ficial level (about ten <strong>of</strong>ficial level meetings to each Ministerial). When it<br />
does so, <strong>the</strong> Board holds institutional and legal powers which are in formal<br />
terms identical to those applicable to Ministerial Level meetings, but those<br />
formal powers are <strong>of</strong>ten exercised with potentially less political impact, since<br />
“<strong>of</strong>ficial level” means at less than Ministerial Level <strong>of</strong> representation, as will<br />
be seen below in Section 7. Most <strong>of</strong> <strong>the</strong> routine business <strong>of</strong> <strong>the</strong> Agency is<br />
conducted at <strong>of</strong>ficial level meetings. However, <strong>the</strong> Board has on numerous<br />
occasions adopted at that level actions <strong>of</strong> quite far-reaching political as well<br />
as legislative and institutional impact, including:<br />
■<br />
Decisions on Membership in <strong>the</strong> Agency, beginning with New<br />
Zealand in 1975 [<strong>IEA</strong>/GB(75)8, Item 3] and most recently for France<br />
in 1991 [<strong>IEA</strong>/GB(91)45, Item 2].<br />
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Decisions Establishing Industry Advisory Bodies, such as <strong>the</strong> oil<br />
Industry Advisory Board (IAB) in 1975 [<strong>IEA</strong>/GB(75)8, Item 5 and<br />
Annex III, p. 19]; and <strong>the</strong> Coal Industry Advisory Board (CIAB) in<br />
1979 [<strong>IEA</strong>/GB(79)49, Item 5, and Annex].<br />
1976 Decisions Increasing Members’ Emergency Oil Reserve<br />
Commitment to 90 days, providing for specified annual increases<br />
until <strong>the</strong> 90 day level would be fully reached in 1980 [<strong>IEA</strong>/GB(76)53,<br />
Item 2(b)].<br />
1976 Decision Adopting <strong>the</strong> <strong>IEA</strong> Long-Term Co-operation<br />
Programme, <strong>the</strong> comprehensive programme for long-term energy<br />
policy and o<strong>the</strong>r arrangements [<strong>IEA</strong>/GB(76)5, Item 2].<br />
1976 Decision Approving <strong>the</strong> Emergency Management Manual<br />
(EMM), containing detailed provisions implementing <strong>the</strong> <strong>IEA</strong><br />
Emergency Sharing System, [<strong>IEA</strong>/GB(76)24, Item 3(d)].<br />
1977 Decision Adopting <strong>the</strong> Preliminary Guidelines for<br />
Collaboration on Energy R & D between <strong>the</strong> <strong>IEA</strong> Countries and<br />
Developing Countries, on policies and procedures for this<br />
collaboration [<strong>IEA</strong>/GB(77)23, Item 4(b) and Annex].<br />
1979 Decision Adopting <strong>the</strong> <strong>IEA</strong> Action on <strong>the</strong> Oil Market<br />
Situation in 1979, containing <strong>the</strong> agreement <strong>of</strong> Members to reduce<br />
demand for oil by about 2 million barrels per day or about 5 per cent<br />
<strong>of</strong> current consumption [<strong>IEA</strong>/GB(79)8, Item 3(a) and Annex III].<br />
1980 Decision Adopting <strong>the</strong> Charter <strong>of</strong> <strong>the</strong> International Energy<br />
Agency Dispute Settlement Centre, providing a system <strong>of</strong><br />
arbitration for oil companies co-operating with <strong>the</strong> Agency’s<br />
Emergency Allocation System [<strong>IEA</strong>/GB(80)56, Item 8 and Annex].<br />
1981 Decision on Preparation for Future Supply Disruptions,<br />
improving procedures for dealing with oil supply disruptions, and<br />
recognizing <strong>the</strong> need to respond to supply disruptions <strong>of</strong> less than<br />
seven per cent provided in <strong>the</strong> I.E.P. Agreement [<strong>IEA</strong>/GB(81)86,<br />
Item 2(b) and Annex I].<br />
1984 Decision on Stocks and Supply Disruptions, on stockdraw<br />
procedures to be employed in response to oil supply disruptions<br />
[<strong>IEA</strong>/GB(84)27, Item 2(a)(ii) and Annex I].<br />
1988 Conclusions on Coal, on <strong>the</strong> assessment <strong>of</strong> <strong>the</strong> coal situation and coal<br />
policy recommendations [<strong>IEA</strong>/GB(88)14, Item 2(a)(ii)(C) and Annex I].<br />
1988 Decision Adopting <strong>the</strong> “CERM Operations Manual-<br />
Consultations on Co-ordinated Emergency Response Measures”,<br />
providing procedures for CERM type operations in cases <strong>of</strong> oil supply<br />
disruptions [<strong>IEA</strong>/GB(88)25, Item 2(b)(ii)].<br />
165
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■<br />
1990 Actions on Relations with European Economies in Transition,<br />
adopting a Programme <strong>of</strong> Work Concerning Energy Policy Contacts with<br />
European Economies in Transition [<strong>IEA</strong>/ GB(90)22, Item 3(b)].<br />
1990-1991 Actions on <strong>the</strong> Gulf Situation, various preparatory<br />
decisions and recommendations in anticipation <strong>of</strong> fur<strong>the</strong>r <strong>IEA</strong> actions<br />
[<strong>IEA</strong>/GB(90)24, 27, 32, 39, 46].<br />
1991 Decision on <strong>the</strong> Co-ordinated Energy Emergency<br />
Contingency Plan in <strong>the</strong> Gulf Situation, adopting <strong>the</strong> <strong>IEA</strong> response<br />
Decision <strong>of</strong> 11 January 1991 [<strong>IEA</strong>/GB(91)1, Item 3 and Annex],<br />
continued in effect by <strong>the</strong> Governing Board on 28 January 1991<br />
[<strong>IEA</strong>/GB(91)3, Item 2 and Annex] and terminated by <strong>the</strong> Board on 6<br />
March 1991 [<strong>IEA</strong>/GB(91)19, Item 3(d)].<br />
1991 Actions on <strong>the</strong> Gulf Crisis: Assessment and Lessons for <strong>IEA</strong><br />
Emergency Preparedness, assessing favourably <strong>the</strong> response <strong>of</strong> <strong>the</strong><br />
Agency and endorsing <strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong> Standing Group on<br />
Emergency Questions on this subject [<strong>IEA</strong>/GB(91)79, Item 4].<br />
1991 Actions on Arrangements for Co-operation with Non-<br />
Members, including <strong>the</strong> former Soviet Union; <strong>the</strong> Czech and Slovak<br />
Republic; <strong>the</strong> European Energy Charter; <strong>the</strong> <strong>IEA</strong> Experts Seminar<br />
among Energy Exporters and Importers; Korea; and <strong>the</strong> Associate<br />
Participation in <strong>IEA</strong> R & D Implementing Agreements [<strong>IEA</strong>/<br />
GB(91)79, Item 5].<br />
1992 General Policy Guidance and Specific Guidelines for Areas<br />
<strong>of</strong> Co-operation with Non-Member Countries, as set forth in Parts<br />
II and III <strong>of</strong> <strong>IEA</strong>/GB(92)18/FINAL, on <strong>IEA</strong> policies for co-operation<br />
with non-Member countries, and decision on <strong>the</strong> mandate <strong>of</strong> <strong>the</strong><br />
Committee on Non-Member Countries [<strong>IEA</strong>/GB(92)25, Item 5(b)].<br />
1993 Action Effecting <strong>the</strong> Withdrawal <strong>of</strong> an Entity Designated by<br />
<strong>the</strong> Former Yugoslavian Government from an <strong>IEA</strong> Implementing<br />
Agreement, and conclusion that <strong>the</strong> dissolution <strong>of</strong> <strong>the</strong> former Socialist<br />
Federal Republic <strong>of</strong> Yugoslavia (SFRY) had brought about <strong>the</strong> extinction<br />
<strong>of</strong> <strong>the</strong> Board’s invitation to <strong>the</strong> SFRY [<strong>IEA</strong>/GB(93)11, Item 6].<br />
1993 Agreement to Hold a Special Informal Meeting<br />
(“Brainstorming Session”) at Ministerial Level on Energy and<br />
<strong>the</strong> Environment, and to hold <strong>the</strong> meeting in March <strong>1994</strong> in<br />
Switzerland [<strong>IEA</strong>/GB(93)65, Item 3].<br />
<strong>The</strong> range <strong>of</strong> Governing Board actions at <strong>of</strong>ficial level is much broader than<br />
<strong>the</strong> foregoing indication <strong>of</strong> major policy, legislative and institutional<br />
measures would suggest. Among <strong>the</strong> most important functions are its<br />
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convening <strong>the</strong> Ministerial Level Board meetings, fixing <strong>the</strong> agendas and<br />
preparing <strong>the</strong> way for Ministerial actions, all extending beyond administration<br />
to influence directly <strong>the</strong> substantive outcome <strong>of</strong> <strong>the</strong> meetings <strong>of</strong> Ministers.<br />
Most <strong>of</strong> <strong>the</strong> routine administration, housekeeping and detailed policy work<br />
<strong>of</strong> <strong>the</strong> Agency has also been carried out in <strong>the</strong> <strong>of</strong>ficial level meetings.<br />
<strong>The</strong> Governing Board meeting at <strong>of</strong>ficial level also takes responsibility<br />
for convening and fixing <strong>the</strong> dates and agendas <strong>of</strong> its own meetings. It<br />
decides upon its own procedures consistent with <strong>the</strong> I.E.P. Agreement,<br />
determines <strong>the</strong> use <strong>of</strong> languages in <strong>the</strong> <strong>IEA</strong>, and deals with a host <strong>of</strong> financial<br />
and programme questions, including <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> annual Programmes<br />
<strong>of</strong> Work and Budgets <strong>of</strong> <strong>the</strong> Agency as well as any supplementary budgets,<br />
audit authorizations and o<strong>the</strong>r budgetary questions. At <strong>of</strong>ficial level meetings<br />
<strong>the</strong> Board fixes <strong>the</strong> scale <strong>of</strong> contributions <strong>of</strong> Members each year and decides<br />
o<strong>the</strong>r financial questions for <strong>the</strong> <strong>IEA</strong>, including <strong>the</strong> acceptance <strong>of</strong> voluntary<br />
contributions. At those meetings <strong>the</strong> Board also elects its own and<br />
Ministerial Chairmen and Vice-Chairmen as required, as well as <strong>the</strong> <strong>of</strong>ficers<br />
<strong>of</strong> each <strong>of</strong> <strong>the</strong> Standing Groups and Committees and members <strong>of</strong> <strong>the</strong> Coal<br />
Industry Advisory Board (CIAB). At <strong>of</strong>ficial level, <strong>the</strong> Board decides upon<br />
questions <strong>of</strong> <strong>the</strong> admission <strong>of</strong> new Members and relations with non-Members,<br />
approves <strong>the</strong> annual <strong>IEA</strong> activities reports <strong>of</strong> <strong>the</strong> Board to <strong>the</strong> OECD<br />
Council, consults on <strong>the</strong> security clearance <strong>of</strong> <strong>IEA</strong> staff holding sensitive<br />
positions in <strong>the</strong> Secretariat, authorizes <strong>IEA</strong> conferences, seminars,<br />
workshops, experts meetings and like events which have an <strong>of</strong>ficial <strong>IEA</strong><br />
connection. Fur<strong>the</strong>r typical subjects <strong>of</strong> <strong>the</strong> Board’s action at <strong>of</strong>ficial level are<br />
participation <strong>of</strong> <strong>the</strong> Agency in politically sensitive outside conferences and<br />
events, authorization <strong>of</strong> arrangements for <strong>the</strong> periodic Allocation Systems<br />
Tests (ASTs) <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Emergency Sharing System and <strong>the</strong> Co-ordinated<br />
Emergency Response Measures (CERM) tests, authorization <strong>of</strong> <strong>IEA</strong><br />
publications, and approval <strong>of</strong> R & D collaborative projects to be carried out<br />
under <strong>IEA</strong> auspices and <strong>the</strong> continuation <strong>of</strong> those projects. Not <strong>the</strong> least <strong>of</strong><br />
those functions is <strong>the</strong> amendment <strong>of</strong> <strong>the</strong> I.E.P. Agreement. All <strong>of</strong> <strong>the</strong><br />
amendments so far in <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency have been related to <strong>the</strong><br />
admission <strong>of</strong> new Members and have been made by <strong>the</strong> Governing Board at<br />
<strong>of</strong>ficial level.<br />
4. Informal Meetings<br />
Actions on matters <strong>of</strong> particular political sensitivity are taken at times by<br />
<strong>the</strong> Governing Board at informal meetings or during informal breaks in <strong>the</strong><br />
course <strong>of</strong> regular meetings. This practice began during <strong>the</strong> I.E.P. Brussels<br />
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negotiations in <strong>1974</strong>, when Energy Co-ordinating Group (ECG) Chairman<br />
Davignon convened heads <strong>of</strong> delegations regularly to work informally<br />
during breaks in <strong>the</strong> regular meetings. This ECG format was transported<br />
fully intact to Paris at <strong>the</strong> outset <strong>of</strong> <strong>the</strong> <strong>IEA</strong> and it has continued ever since<br />
under Board Chairman Davignon and his successors. Typically <strong>the</strong><br />
Executive Director has brought toge<strong>the</strong>r <strong>the</strong> Chairman and a group <strong>of</strong><br />
Heads <strong>of</strong> Delegations in <strong>the</strong> evening immediately preceding <strong>the</strong> Board<br />
meeting, and <strong>the</strong> breaks on meeting days have become informal meetings.<br />
<strong>The</strong>se meetings have been attended on <strong>the</strong> Secretariat side only by <strong>the</strong><br />
Executive Director, <strong>the</strong> Deputy and <strong>the</strong> Directors or o<strong>the</strong>r <strong>of</strong>ficers whose<br />
presence was necessary. <strong>The</strong>se meetings provided discreet opportunities for<br />
exchanges <strong>of</strong> information and views on such international energy relations<br />
questions as OPEC actions, developing country energy relations, <strong>the</strong><br />
situation <strong>of</strong> Eastern European and o<strong>the</strong>r non-Member countries,<br />
arrangements with new Members, as well as <strong>the</strong> election <strong>of</strong> <strong>of</strong>ficers <strong>of</strong> <strong>the</strong><br />
Board, Standing Groups and Committees, o<strong>the</strong>r personnel matters and <strong>the</strong><br />
more sensitive aspects <strong>of</strong> <strong>the</strong> items on <strong>the</strong> meeting agenda.<br />
In addition <strong>the</strong>re have been a number <strong>of</strong> informal “non-meetings”<br />
designed to provide a suitable forum for free discussion and “brainstorming”<br />
on particular topics or for development <strong>of</strong> suggestions on activities or future<br />
directions <strong>of</strong> <strong>the</strong> Agency. Particular topics have included <strong>the</strong> Long-Term Cooperation<br />
Programme, <strong>the</strong> Action on Coal, oil import yardsticks and<br />
objectives, <strong>the</strong> 1984 Oil Stocks Supply Disruption Decision, producer/<br />
consumer supply and demand, energy and <strong>the</strong> environment, and relations<br />
with non-Member countries. Most <strong>of</strong>ten those informal meetings have been<br />
conducted in <strong>the</strong> Paris region but away from <strong>the</strong> <strong>IEA</strong> premises, rarely in <strong>the</strong><br />
normal <strong>IEA</strong> meeting facilities in Paris. Sometimes <strong>the</strong> outcomes <strong>of</strong> <strong>the</strong>se<br />
meetings have been reported to <strong>the</strong> Board at <strong>of</strong>ficial level which noted <strong>the</strong><br />
report [See e.g. <strong>IEA</strong>/GB(90)22, Item 3(a)and <strong>IEA</strong>/GB(92)17, Item 3(a)].<br />
<strong>The</strong> “non-meetings” have not been regulated or made <strong>the</strong> subject <strong>of</strong> explicit<br />
Governing Board decisions. <strong>The</strong>y have been held when <strong>the</strong>y are found to be<br />
useful. When suggestions have been made for informal meetings on a<br />
particular topic, <strong>the</strong> arrangements were <strong>the</strong>n developed informally, and<br />
references to <strong>the</strong> outcome <strong>of</strong> those meetings as such sometimes found <strong>the</strong>ir<br />
way into <strong>the</strong> Board’s formal Conclusions [e.g. <strong>IEA</strong>/GB(92)17, Item 3] and at<br />
o<strong>the</strong>r times <strong>the</strong>y did not.<br />
On 19 October 1993 <strong>the</strong> Governing Board at <strong>of</strong>ficial level agreed, for<br />
<strong>the</strong> first time, to an informal Ministerial Level meeting, to be conducted as a<br />
“brainstorming session” on energy and <strong>the</strong> environment issues. Upon <strong>the</strong><br />
invitation <strong>of</strong> <strong>the</strong> President <strong>of</strong> Switzerland, <strong>the</strong> Board decided that <strong>the</strong><br />
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informal Ministerial meeting would be held at Interlaken, Switzerland in<br />
March <strong>1994</strong> [<strong>IEA</strong>/GB(93)65, Item 3].<br />
5. Place and Frequency <strong>of</strong> Meetings<br />
Aside from lodging <strong>the</strong> <strong>IEA</strong> within <strong>the</strong> OECD administrative framework in<br />
Paris, <strong>the</strong>re is no reference in ei<strong>the</strong>r <strong>the</strong> I.E.P. Agreement or <strong>the</strong> Council Decision<br />
about <strong>the</strong> possible location <strong>of</strong> meetings or o<strong>the</strong>r operations <strong>of</strong> <strong>the</strong> Agency. Since<br />
<strong>the</strong> OECD is an important meeting and Secretariat centre, <strong>the</strong> OECD<br />
relationship doubtless created an expectation that <strong>the</strong> Agency would use OECD<br />
meeting facilities in Paris. That indeed has been <strong>the</strong> case, for almost all meetings<br />
<strong>of</strong> <strong>IEA</strong> bodies, including <strong>the</strong> Governing Board, have taken place in Paris.<br />
In 1975 this question arose in <strong>the</strong> Board following concern about<br />
convening <strong>IEA</strong> meetings away from Paris and it gave rise to objections<br />
based on cost and convenience to Delegations and to <strong>the</strong> Secretariat based<br />
in Paris. That led to <strong>the</strong> Governing Board Conclusion<br />
that meetings <strong>of</strong> <strong>the</strong> Governing Board and <strong>the</strong> o<strong>the</strong>r bodies <strong>of</strong><br />
<strong>the</strong> Agency should normally be held in Paris; before convening a<br />
meeting elsewhere, <strong>the</strong> Chairman concerned shall consult with<br />
<strong>the</strong> Executive Director on <strong>the</strong> necessity for holding <strong>the</strong> meeting<br />
elsewhere and <strong>the</strong> budgetary implications <strong>of</strong> <strong>the</strong> decision [See<br />
<strong>IEA</strong>/GB(75)54, Item 8(3)].<br />
This formulation took into account <strong>the</strong> corresponding provision <strong>of</strong> <strong>the</strong><br />
OECD Rules <strong>of</strong> Procedure [Rule 4 b)] which requires <strong>the</strong> Secretary-<br />
General’s approval for meetings away from Paris, while <strong>the</strong> <strong>IEA</strong> Governing<br />
Board Conclusion, using <strong>the</strong> language <strong>of</strong> recommendation and consultation,<br />
is potentially more flexible.<br />
Since adopting <strong>the</strong> <strong>IEA</strong> conclusion quoted above, <strong>the</strong> Governing<br />
Board itself has met once in Brussels [June 1975, see <strong>IEA</strong>/GB(75)58] and in<br />
Tokyo [April 1978, see <strong>IEA</strong>/GB(78)18] and <strong>the</strong> Board is expected to meet<br />
in Kyoto, Japan in April <strong>1994</strong> [See <strong>IEA</strong>/GB(93)57, Item 11;<br />
<strong>IEA</strong>/GB(93)65, Item 10]. Except as noted above, <strong>the</strong> practice has been for<br />
<strong>IEA</strong> Governing Board, Standing Group and Committee <strong>of</strong>ficial meetings to<br />
be held in Paris. Only rarely have <strong>the</strong>y been held in Paris away from OECD<br />
headquarters, and that when <strong>the</strong> sole facilities available were those <strong>of</strong> <strong>the</strong><br />
host government or <strong>of</strong> o<strong>the</strong>r organizations located in that city. <strong>The</strong> Industry<br />
Advisory Board (IAB), on <strong>the</strong> o<strong>the</strong>r hand, has met regularly at sites away<br />
from Paris as arranged by <strong>the</strong> oil companies represented on <strong>the</strong> IAB.<br />
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Although <strong>the</strong> many Executive Committees established under <strong>IEA</strong><br />
energy R & D Implementing Agreements have met frequently away from<br />
<strong>IEA</strong> headquarters in Paris (<strong>the</strong>y <strong>of</strong>ten meet for programme reasons at<br />
various locations in <strong>the</strong> countries <strong>of</strong> participants), those Committees are not<br />
<strong>of</strong>ficial <strong>IEA</strong> bodies. <strong>The</strong>y operate under <strong>the</strong>ir own rules and are free to meet<br />
wherever <strong>the</strong>y wish. <strong>The</strong> Agency does not bear any <strong>of</strong> <strong>the</strong> costs <strong>of</strong> such<br />
meetings o<strong>the</strong>r than <strong>the</strong> cost <strong>of</strong> having <strong>the</strong> <strong>IEA</strong> Secretariat represented when<br />
an <strong>IEA</strong> presence is appropriate.<br />
<strong>The</strong> frequency <strong>of</strong> Governing Board meetings depends upon <strong>the</strong> work<br />
<strong>of</strong> <strong>the</strong> Agency and <strong>the</strong> need to bring toge<strong>the</strong>r <strong>the</strong> Ministers or <strong>of</strong>ficials.<br />
<strong>The</strong>re have been no decisions fixing meeting calendars or <strong>the</strong> frequency <strong>of</strong><br />
Governing Board meetings ei<strong>the</strong>r at Ministerial or <strong>of</strong>ficial level. In 1977<br />
<strong>the</strong>re was a strong suggestion that <strong>the</strong> Ministers should meet annually for<br />
<strong>the</strong> purpose <strong>of</strong> acting on <strong>the</strong> results <strong>of</strong> <strong>the</strong> annual reviews <strong>of</strong> <strong>the</strong> Decision on<br />
Group Objectives and Principles for Energy Policy [See <strong>IEA</strong>/GB(77)33,<br />
Cover Note, paragraph 4 and Annex II to <strong>the</strong> Conclusions, draft paragraphs<br />
(c) and (e)(1)]. In <strong>the</strong> Board’s final Conclusions on that Decision<br />
[<strong>IEA</strong>/GB(77)53], <strong>the</strong>re was no reference to <strong>the</strong> timing <strong>of</strong> Ministerial Level<br />
meetings <strong>of</strong> <strong>the</strong> Governing Board. Meeting fourteen times in all, Ministers<br />
have tended to meet regularly every two years to give Ministerial impetus<br />
and direction to <strong>IEA</strong> work, and <strong>the</strong>y meet when special circumstances<br />
require more frequent meetings, as <strong>the</strong>y did in <strong>the</strong> period 1979-1982. But<br />
it was not necessary for Ministers to meet during <strong>the</strong> Gulf Crisis <strong>of</strong> 1990-<br />
1991 when major Governing Board action was taken at <strong>of</strong>ficial level<br />
meetings. A Ministerial Level meeting was foreseen but did not take place<br />
until after <strong>the</strong> <strong>IEA</strong> Co-ordinated Energy Emergency Contingency Plan on<br />
<strong>the</strong> Gulf Crisis was completed in 1991.<br />
At <strong>of</strong>ficial level <strong>the</strong>re has been a wide range in <strong>the</strong> frequency <strong>of</strong> Board<br />
meetings over <strong>the</strong> years. Meetings were held most <strong>of</strong>ten during <strong>the</strong> early<br />
formation period <strong>of</strong> <strong>the</strong> Agency, for example fourteen meetings in 1975,<br />
nine meetings 1976. Recently <strong>the</strong> number <strong>of</strong> meetings per year (including<br />
Ministerial Level Meetings) has varied from four to eight. <strong>The</strong> average up<br />
to <strong>the</strong> present time is seven meetings per year.<br />
<strong>The</strong>re is, however, a minimum number <strong>of</strong> meetings necessary to<br />
satisfy <strong>the</strong> <strong>IEA</strong>’s normal institutional requirements. <strong>The</strong> Governing Board<br />
must in practice meet early each year to adopt <strong>the</strong> scale <strong>of</strong> contributions, to<br />
elect <strong>of</strong>ficers and to approve <strong>the</strong> annual report <strong>of</strong> <strong>the</strong> Board to <strong>the</strong> OECD<br />
Council for <strong>the</strong> previous calendar year, and to conduct general business as<br />
well at <strong>the</strong>se meetings early in <strong>the</strong> year. In <strong>the</strong> autumn meeting <strong>of</strong> each year<br />
<strong>the</strong> Board has adopted <strong>the</strong> practice <strong>of</strong> approving <strong>the</strong> directions <strong>of</strong> work<br />
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contained in <strong>the</strong> draft Programme <strong>of</strong> Work and instructing <strong>the</strong> Budget<br />
Committee on <strong>the</strong> preparations for <strong>the</strong> draft Budget for <strong>the</strong> following year,<br />
which must be done at about that time to maintain <strong>the</strong> Programme <strong>of</strong> Work<br />
and Budget adoption schedule. <strong>The</strong>n in December <strong>of</strong> each year <strong>the</strong> Board<br />
has convened, <strong>of</strong>ten for multiple purposes, but also to take <strong>the</strong> necessary<br />
formal action <strong>of</strong> adopting on time <strong>the</strong> final Programme <strong>of</strong> Work and Budget<br />
for <strong>the</strong> following year. While some <strong>of</strong> those actions could be taken by <strong>the</strong><br />
written procedure, <strong>the</strong> Board has preferred to consider <strong>the</strong>se questions in<br />
full meetings (<strong>the</strong> adoption <strong>of</strong> scales <strong>of</strong> contributions has been <strong>the</strong> only<br />
exception). In practice <strong>the</strong> Board has always found it necessary to meet<br />
more <strong>of</strong>ten than this notional minimum would suggest.<br />
6. Convening Meetings<br />
<strong>The</strong>re are no specific provisions in ei<strong>the</strong>r <strong>the</strong> I.E.P. Agreement or <strong>the</strong> rules<br />
adopted by <strong>the</strong> Governing Board concerning <strong>the</strong> competence to convene <strong>the</strong><br />
Governing Board ei<strong>the</strong>r at Ministerial or <strong>of</strong>ficial level, and <strong>the</strong>re is nothing<br />
about <strong>the</strong> procedure to be followed. However, <strong>the</strong> Governing Board’s power<br />
to adopt its own rules <strong>of</strong> procedure [See Article 50.2] clearly indicates that<br />
<strong>the</strong> convening <strong>of</strong> Board meetings falls within <strong>the</strong> Governing Board’s powers.<br />
In practice <strong>the</strong> Governing Board itself has fixed <strong>the</strong> Board’s meeting<br />
dates. That has been virtually always <strong>the</strong> case for Ministerial Level<br />
meetings, <strong>the</strong> convening decision being taken by <strong>the</strong> Board at <strong>of</strong>ficial level as<br />
part <strong>of</strong> <strong>the</strong> preparation for <strong>the</strong> Ministerial. For example, <strong>the</strong> Board at <strong>of</strong>ficial<br />
level on 22 October 1992 decided to hold <strong>the</strong> next Ministerial Level meeting<br />
on 4 June 1993 [<strong>IEA</strong>/GB(92)45, Item 8]. Official level Board meetings have<br />
been usually convened by decision taken at <strong>the</strong> previous meeting at that<br />
level. Thus <strong>the</strong> Board normally has fixed at each meeting <strong>the</strong> date <strong>of</strong> <strong>the</strong><br />
next meeting and recently it has tended to decide or indicate <strong>the</strong> probable<br />
date <strong>of</strong> its following one as well. When it was not possible to fix <strong>the</strong> date <strong>of</strong><br />
<strong>the</strong> next meeting, <strong>the</strong> Board has left <strong>the</strong> question open for determination by<br />
agreement between <strong>the</strong> Chairman and <strong>the</strong> Executive Director.<br />
Since <strong>the</strong>re are no rules about dates or frequency <strong>of</strong> meetings, <strong>the</strong><br />
Board normally enjoys complete discretion in convening its meetings.<br />
However, this is subject to important exceptions arising from <strong>the</strong> operation<br />
<strong>of</strong> <strong>the</strong> <strong>IEA</strong> emergency response systems, which can trigger Board meetings<br />
in cases <strong>of</strong> supply disruptions. Article 19.1 to 19.3 inclusive provides, in<br />
effect, that <strong>the</strong> Board shall meet within six days after <strong>the</strong> Secretariat makes<br />
a finding <strong>of</strong> an Emergency Sharing System oil supply reduction as described<br />
in Article 19.1. Parallel meeting requirements are contained in Article <strong>20</strong><br />
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for cases <strong>of</strong> continuing severe crises (requiring a meeting within seven<br />
days), and in Article 21 upon a request by any Member to <strong>the</strong> Secretariat to<br />
make a finding <strong>of</strong> a selective trigger oil supply shortfall affecting one or<br />
more countries. When <strong>the</strong> Secretariat makes a later finding that <strong>the</strong><br />
shortfall level has fallen below <strong>the</strong> applicable activation level, <strong>the</strong> Governing<br />
Board is similarly required to meet within seven days, this time to consider<br />
deactivating <strong>the</strong> System [Article 23].<br />
Two decisions <strong>of</strong> <strong>the</strong> Governing Board on oil supply disruption<br />
responses have also specifically foreseen <strong>the</strong> “prompt” convening <strong>of</strong> <strong>the</strong><br />
Board. In <strong>the</strong> 1981 “Decision on Preparation for Future Supply<br />
Disruptions” [<strong>IEA</strong>/GB(81)86, Annex I, paragraph 3], <strong>the</strong> Board decided<br />
that in <strong>the</strong> event <strong>of</strong> a supply disruption<br />
<strong>The</strong> Governing Board will meet promptly at <strong>the</strong> appropriate<br />
level to consider and decide upon what action, if any, is<br />
necessary to meet <strong>the</strong> situation as it exists so as to avoid serious<br />
economic damage, should <strong>the</strong> assessment <strong>of</strong> <strong>the</strong> situation<br />
indicate that this might o<strong>the</strong>rwise occur.<br />
<strong>The</strong> Governing Board’s July 1984 “Decision on Stocks and Supply<br />
Disruptions” [<strong>IEA</strong>/GB(84)27, Annex I, paragraph 8] provides <strong>the</strong> following<br />
more specific formulation:<br />
<strong>The</strong> Governing Board will meet promptly at <strong>the</strong> appropriate level<br />
upon <strong>the</strong> call <strong>of</strong> <strong>the</strong> Chairman <strong>of</strong> <strong>the</strong> Governing Board when he<br />
determines that a supply disruption involving a significant net loss<br />
<strong>of</strong> world oil supplies, after taking into account estimated excess<br />
production and facility capacity available, exits or is imminent . . .<br />
7. Representation<br />
Representation in <strong>the</strong> Governing Board is open to Member governments only,<br />
except for <strong>the</strong> rare cases <strong>of</strong> observers whose status and representation are<br />
discussed below [See Section A-10]. Questions about <strong>the</strong> identity, role or<br />
level <strong>of</strong> representatives have never been specifically addressed by <strong>the</strong><br />
Governing Board. Clearly for Ministerial Level meetings <strong>the</strong> competent<br />
Minister or Ministers have been expected to attend personally and usually do.<br />
<strong>The</strong> Delegation lists have been communicated by Delegations to <strong>the</strong><br />
Secretariat, and in addition to <strong>the</strong> Ministers <strong>the</strong> lists normally included <strong>the</strong><br />
OECD Permanent Delegates, o<strong>the</strong>r members <strong>of</strong> <strong>the</strong> OECD Delegations and<br />
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epresentatives from capitals. <strong>The</strong>re being no formal accreditation<br />
procedure, each Member has remained free to designate <strong>the</strong> representatives it<br />
wishes, and <strong>the</strong> Delegation statement to <strong>the</strong> Secretariat has been taken as<br />
sufficient, <strong>the</strong> statement usually designating <strong>the</strong> <strong>of</strong>ficial Delegate and an<br />
alternate. Access to <strong>the</strong> meeting rooms is strictly limited to <strong>the</strong> designated<br />
representatives and o<strong>the</strong>r authorized persons. For meetings <strong>of</strong> <strong>the</strong> Governing<br />
Board at <strong>of</strong>ficial level, essentially <strong>the</strong> same procedure has been followed.<br />
While Members are free to designate whomever <strong>the</strong>y wish as representatives,<br />
<strong>the</strong>re have been informal discussions about <strong>the</strong> <strong>of</strong>ficial levels and<br />
particular affiliations <strong>of</strong> representatives. Members are expected to be<br />
represented in <strong>the</strong> Board whenever possible by high level <strong>of</strong>ficials from<br />
capitals, by individuals at Assistant Secretary or Director General or<br />
comparable civil service levels <strong>of</strong> responsibility. <strong>The</strong>re have been inquiries<br />
about Members bringing into <strong>the</strong>ir Board representation individuals<br />
employed by energy companies, but such designations have been<br />
discouraged and it is believed that <strong>the</strong>y have never materialized. This has<br />
been in keeping with <strong>the</strong> notion that “<strong>of</strong>ficial level” means government<br />
<strong>of</strong>ficials who carry public sector responsibilities at policy making level.<br />
8. Rules <strong>of</strong> Procedure<br />
<strong>The</strong> Governing Board is empowered by Article 50.2 <strong>of</strong> <strong>the</strong> I.E.P. Agreement,<br />
as set forth below, to adopt its own rules <strong>of</strong> procedure:<br />
<strong>The</strong> Governing Board, acting by majority, shall adopt its own<br />
rules <strong>of</strong> procedure. Unless o<strong>the</strong>rwise decided in <strong>the</strong> rules <strong>of</strong><br />
procedure, <strong>the</strong>se rules shall also apply to <strong>the</strong> Management<br />
Committee and <strong>the</strong> Standing Groups.<br />
In <strong>the</strong> Council Decision this is expressed in Article 4 in <strong>the</strong> following terms:<br />
“<strong>The</strong> Governing Board shall adopt its own rules <strong>of</strong> procedure and voting<br />
rules”. With respect to <strong>the</strong> OECD Decision, <strong>the</strong> intention was to avoid <strong>the</strong><br />
application <strong>of</strong> <strong>the</strong> OECD Rules <strong>of</strong> Procedure (which had been viewed as being<br />
heavy in <strong>the</strong>ir application, and which clearly could not apply to <strong>IEA</strong><br />
operations). Most <strong>of</strong> <strong>the</strong> OECD Rules <strong>of</strong> Procedure could not by <strong>the</strong>ir terms<br />
apply to <strong>the</strong> <strong>IEA</strong> without causing conflicts with <strong>the</strong> I.E.P. Agreement or <strong>the</strong><br />
Council Decision, for example conflicts over <strong>the</strong> rules concerning <strong>the</strong> convening<br />
<strong>of</strong> meetings, <strong>the</strong> alteration <strong>of</strong> <strong>the</strong> date <strong>of</strong> a meeting, <strong>the</strong> place <strong>of</strong> meetings, <strong>the</strong><br />
admission <strong>of</strong> observers, agendas, <strong>of</strong>ficers, acts <strong>of</strong> <strong>the</strong> Organisation, subsidiary<br />
bodies, languages, and records and documents. <strong>The</strong> specific provisions for <strong>IEA</strong><br />
173
ules <strong>of</strong> procedure and <strong>the</strong> inclusion <strong>of</strong> many procedural provisions in <strong>the</strong> I.E.P.<br />
Agreement ensured that <strong>the</strong>re could be no question about whe<strong>the</strong>r <strong>the</strong> OECD<br />
rules would apply in <strong>the</strong> absence <strong>of</strong> Governing Board action: <strong>the</strong> <strong>IEA</strong><br />
provisions were considered to pre-empt <strong>the</strong> field. OECD rules would not<br />
apply unless specifically adopted by <strong>the</strong> Governing Board.<br />
<strong>The</strong> intention <strong>of</strong> <strong>the</strong> founders was to continue in <strong>the</strong> <strong>IEA</strong> <strong>the</strong><br />
simplicity and operational efficiency that had characterized <strong>the</strong> <strong>1974</strong><br />
Brussels ECG negotiations on <strong>the</strong> I.E.P. Agreement. <strong>The</strong> ECG itself did not<br />
apply formal rules <strong>of</strong> procedure but worked in an informal manner adapted<br />
to achieve rapid results in setting in place <strong>the</strong> Emergency Sharing System<br />
and <strong>IEA</strong> institutions before fur<strong>the</strong>r oil supply disturbances might arise.<br />
On 18 November <strong>1974</strong>, at <strong>the</strong> Governing Board’s first meeting, which<br />
immediately followed <strong>the</strong> signature <strong>of</strong> <strong>the</strong> I.E.P. Agreement, <strong>the</strong> Board<br />
decided to defer <strong>the</strong> preparation <strong>of</strong> formal rules <strong>of</strong> procedure and to proceed<br />
in a flexible way designed to assure maximum operational efficiency and<br />
simplicity [<strong>IEA</strong>/GB(74)9(1st Revision) Preliminary Matters, paragraphs (b)<br />
and (d)]. <strong>The</strong> Board also decided to deem its meetings joint meetings <strong>of</strong> <strong>the</strong><br />
Board and Management Committee (i.e. to avoid having separate meetings<br />
<strong>of</strong> <strong>the</strong> Committee) and to dispense with formal minutes in <strong>the</strong> absence <strong>of</strong> a<br />
decision specifically requesting <strong>the</strong> preparation <strong>of</strong> minutes. On rules <strong>of</strong><br />
procedure and manner <strong>of</strong> proceeding <strong>the</strong> following language was adopted:<br />
(b) preparation <strong>of</strong> formal rules <strong>of</strong> procedure would be deferred<br />
until <strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency gained working experience<br />
on which <strong>the</strong> rules could be predicated.<br />
(d) <strong>the</strong> Board would seek to proceed in a flexible way assuring<br />
maximum operational efficiency and simplicity.<br />
<strong>The</strong> question <strong>of</strong> rules <strong>of</strong> procedure was subordinated to <strong>the</strong> concern for <strong>the</strong> Agency’s<br />
operational requirements for flexibility, efficiency and simplicity. As an operational<br />
Agency, <strong>the</strong> <strong>IEA</strong> required more flexibility than <strong>the</strong> OECD. Thus <strong>the</strong> <strong>IEA</strong> could not<br />
afford to dedicate Delegation and staff resources to <strong>the</strong> development <strong>of</strong> an unnecessary<br />
system <strong>of</strong> procedural rules which might lead <strong>the</strong> Board into unproductive<br />
procedural debates about adopting, interpreting and applying <strong>the</strong> rules.<br />
<strong>The</strong> procedural rules <strong>the</strong> Agency actually needed were already<br />
contained in <strong>the</strong> I.E.P. Agreement itself, e.g.:<br />
Governing Board composition Article 50.1<br />
Election <strong>of</strong> Chairmen and Vice-Chairmen <strong>of</strong> <strong>the</strong> Board Article 50.3<br />
Binding character <strong>of</strong> decisions Article 52.1<br />
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Non-binding character <strong>of</strong> recommendations Article 52.2<br />
Management Committee and Standing Groups: Articles 53-58<br />
composition, functions, rule on convening meetings,<br />
election <strong>of</strong> <strong>of</strong>ficers<br />
Voting rules: three differently defined majorities and Articles 61-62<br />
unanimity, applications to particular subjects<br />
Procedures for activating <strong>the</strong> Emergency Articles 19-21<br />
Sharing System<br />
Creation <strong>of</strong> o<strong>the</strong>r organs Article 49.2<br />
Delegation <strong>of</strong> power Article 51.3<br />
Budget submission and adoption Article 64.3<br />
Special activities: abstention, information and Article 65<br />
special voting procedures<br />
During <strong>the</strong> period since <strong>the</strong> I.E.P Agreement was signed, <strong>the</strong>re have also<br />
been a few new rules adopted by <strong>the</strong> Governing Board, such as <strong>the</strong> rules<br />
quoted above in this Section, rules on languages, rules on <strong>the</strong> frequency and<br />
place <strong>of</strong> meetings, on documents and access to <strong>IEA</strong> meetings. A number <strong>of</strong><br />
procedural provisions governing specific subjects are found in <strong>the</strong> Security<br />
Principles and Procedures as well as in <strong>the</strong> comprehensive programme<br />
decisions; examples <strong>of</strong> such provisions include those for <strong>the</strong> Long-Term Cooperation<br />
Programme <strong>of</strong> 1976 (LTCP), <strong>the</strong> Emergency Management<br />
Manual (EMM), <strong>the</strong> Dispute Settlement Centre (DSC), <strong>the</strong> 1981 Decision on<br />
Preparation for Future Supply Disruptions and <strong>the</strong> 1984 Decision on Stocks<br />
and Supply Disruptions.<br />
In a few instances Delegations to <strong>the</strong> <strong>IEA</strong> have informally raised <strong>the</strong><br />
question <strong>of</strong> whe<strong>the</strong>r <strong>the</strong> Agency should not, like <strong>the</strong> OECD, have more<br />
systematic and complete rules <strong>of</strong> procedure. This type <strong>of</strong> question was logically<br />
raised in <strong>the</strong> context <strong>of</strong> a specific Delegation need for earlier distribution <strong>of</strong><br />
Agendas or o<strong>the</strong>r meeting documents. In each <strong>of</strong> those cases <strong>the</strong> Secretariat<br />
has given <strong>the</strong> necessary explanations or informal assurances to <strong>the</strong> satisfaction<br />
<strong>of</strong> <strong>the</strong> interested Delegations. Because <strong>of</strong> <strong>the</strong> specialized application <strong>of</strong> many<br />
<strong>of</strong> <strong>the</strong> rules in <strong>the</strong> programme and o<strong>the</strong>r decisions mentioned above, <strong>the</strong>re<br />
has never been a call for a general codification <strong>of</strong> <strong>the</strong> rules.<br />
<strong>The</strong> Governing Board is, <strong>of</strong> course, required to apply <strong>the</strong> procedural<br />
rules established in <strong>the</strong> I.E.P. Agreement. <strong>The</strong> Board o<strong>the</strong>rwise remains free<br />
to apply or not to apply or to modify rules which <strong>the</strong> Board itself<br />
establishes. In short, apart from I.E.P. requirements <strong>the</strong> Board is master <strong>of</strong><br />
its own procedures and may proceed case by case as it finds appropriate to<br />
meet <strong>the</strong> needs <strong>of</strong> situations as <strong>the</strong>y arise. This it has done throughout <strong>the</strong><br />
175
history <strong>of</strong> <strong>the</strong> Agency. <strong>The</strong> <strong>IEA</strong>’s early concepts <strong>of</strong> flexibility, efficiency and<br />
simplicity have continued to govern its approach to this subject, and <strong>the</strong>y<br />
have contributed substantially to <strong>the</strong> effectiveness and success <strong>of</strong> <strong>the</strong><br />
Agency.<br />
9. Closed and Open Meetings<br />
Meetings <strong>of</strong> <strong>the</strong> Governing Board have always been held in private without<br />
<strong>the</strong> press or <strong>the</strong> public. In a number <strong>of</strong> instances <strong>the</strong> Board has arranged<br />
for <strong>the</strong> presence <strong>of</strong> representatives <strong>of</strong> <strong>the</strong> press immediately before <strong>the</strong><br />
meeting starts, particularly for television and still photography when <strong>the</strong><br />
meeting would attract substantial press and public interest. After <strong>the</strong> few<br />
minutes required to complete <strong>the</strong>ir work, <strong>the</strong> members <strong>of</strong> <strong>the</strong> press left <strong>the</strong><br />
room; after security <strong>of</strong>ficers confirmed that no unauthorized persons<br />
remained in <strong>the</strong> room, <strong>the</strong> meeting commenced. Although it lies within <strong>the</strong><br />
powers <strong>of</strong> <strong>the</strong> Governing Board to open a meeting to <strong>the</strong> press or public, this<br />
has never been done in <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency up to <strong>the</strong> present time.<br />
Provision has been made for specific observers to attend meetings <strong>of</strong> <strong>the</strong><br />
Governing Board, but that requires a Governing Board authorization which<br />
is seldom granted. <strong>The</strong> Executive Director is also authorized to admit<br />
persons to meetings <strong>of</strong> <strong>the</strong> Governing Board, as will be seen below [See<br />
Section A-10 below].<br />
<strong>The</strong> formal basis for <strong>the</strong> closed meetings <strong>of</strong> <strong>the</strong> Governing Board is<br />
found in <strong>the</strong> <strong>IEA</strong> Security Principles and Procedures [discussed in detail<br />
below in Chapter VIII, Section B]. Paragraph 10 <strong>of</strong> <strong>the</strong> Security Principles<br />
and Procedures [<strong>IEA</strong>/GB(77)12] states <strong>the</strong> fundamental rule as follows:<br />
Access to all <strong>IEA</strong> meetings, whe<strong>the</strong>r held in <strong>the</strong> OECD or<br />
elsewhere, shall be strictly limited to authorised representatives<br />
<strong>of</strong> Participating Countries, to Staff and to o<strong>the</strong>r persons<br />
authorised by <strong>the</strong> Executive Director.<br />
Concerning meetings held in <strong>the</strong> OECD — which is <strong>the</strong> great majority <strong>of</strong><br />
<strong>the</strong>m — paragraph 8 <strong>of</strong> <strong>the</strong> Security document cited above contains <strong>the</strong><br />
statement that:<br />
During each meeting OECD security personnel shall provide such<br />
coverage as may be required to assure that only persons in possession<br />
<strong>of</strong> appropriate Agency admittance cards are afforded access to <strong>the</strong><br />
immediate area and admittance to <strong>the</strong> conference rooms.<br />
176
When <strong>the</strong> Board meetings are held outside <strong>of</strong> <strong>the</strong> OECD, security measures<br />
are <strong>the</strong> responsibility <strong>of</strong> <strong>the</strong> host country, in accordance with paragraph 9<br />
which was applied in <strong>the</strong> cases <strong>of</strong> Board meetings in Brussels and Tokyo<br />
[See <strong>the</strong> <strong>IEA</strong> Security Regulations 1-6 to 1-8 inclusive, adopted by <strong>the</strong><br />
Executive Director, for fur<strong>the</strong>r formulations <strong>of</strong> <strong>the</strong> foregoing rules].<br />
In practice most members <strong>of</strong> <strong>the</strong> Secretariat have not been admitted<br />
to Board meetings. Those who need access have been permitted to enter <strong>the</strong><br />
meeting room when <strong>the</strong> Board is in session. <strong>The</strong> great majority <strong>of</strong> <strong>IEA</strong><br />
Staff, having insufficient reason to attend, has not been admitted. This<br />
practice has been applied both to Ministerial and to <strong>of</strong>ficial level meetings <strong>of</strong><br />
<strong>the</strong> Board and reflects <strong>the</strong> policy <strong>of</strong> strictly limited access to Board meetings<br />
as well as <strong>the</strong> sense that <strong>the</strong> Board may conduct its business more effectively<br />
within a compact group.<br />
10. Observers<br />
<strong>The</strong> Agency has maintained a guarded approach to <strong>the</strong> question <strong>of</strong> <strong>the</strong><br />
admission <strong>of</strong> observers to meetings <strong>of</strong> <strong>the</strong> Governing Board. Although <strong>the</strong><br />
Agency’s broad authority to enter into external relations includes <strong>the</strong><br />
admission <strong>of</strong> observers, arrangements for observers are seldom made and<br />
only for <strong>the</strong> most compelling reasons, as will be seen below. <strong>The</strong> external<br />
relations authority is stated in Article 63 <strong>of</strong> <strong>the</strong> I.E.P. Agreement as follows:<br />
In order to achieve <strong>the</strong> objectives <strong>of</strong> <strong>the</strong> Program, <strong>the</strong> Agency<br />
may establish appropriate relations with non-participating<br />
countries, international organisations, whe<strong>the</strong>r governmental or<br />
non-governmental, o<strong>the</strong>r entities and individuals [See also<br />
Article 12 <strong>of</strong> <strong>the</strong> Council Decision where a parallel text appears].<br />
Article 63 gives <strong>the</strong> Governing Board <strong>the</strong> widest discretion in determining<br />
whe<strong>the</strong>r or not to grant observer status and to fix <strong>the</strong> terms, ei<strong>the</strong>r by a<br />
general rule or an ad hoc decision, on which that status might be granted.<br />
However, <strong>the</strong> Governing Board has not adopted general rules on <strong>the</strong><br />
admission <strong>of</strong> observers to its meetings, preferring to leave that to ad hoc<br />
decisions when <strong>the</strong> question should arise and <strong>the</strong> circumstances are known.<br />
As recently as 1992 <strong>the</strong> Governing Board considered non-Member country<br />
participation in <strong>the</strong> <strong>IEA</strong>. At that time in adopting <strong>the</strong> <strong>IEA</strong> “Guidelines for<br />
Areas <strong>of</strong> NMC Co-operation” <strong>the</strong> activities <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong> Board stated<br />
that:<br />
177
Participation by NMCs in <strong>IEA</strong> meetings should be ad hoc and<br />
informal. NMCs do not participate in Governing Board . . .<br />
meetings unless <strong>the</strong> Governing Board were to decide o<strong>the</strong>rwise.<br />
To <strong>the</strong> extent possible, <strong>the</strong> number <strong>of</strong> NMCs invited to an <strong>IEA</strong><br />
meeting should be kept to <strong>the</strong> minimum necessary to accomplish<br />
<strong>the</strong> purpose <strong>of</strong> <strong>the</strong> meeting [<strong>IEA</strong>/GB(92)25, Item 5(b);<br />
<strong>IEA</strong>/GB(92)18/FINAL, III. A].<br />
Aside from <strong>the</strong> special situations described below, normally no observers are<br />
admitted to <strong>the</strong> Governing Board meeting room.<br />
<strong>The</strong> formal rules are silent on <strong>the</strong> specific subject <strong>of</strong> observers, except for<br />
<strong>the</strong> participation <strong>of</strong> <strong>the</strong> European Communities (European Union) and <strong>the</strong><br />
Government <strong>of</strong> Norway. <strong>The</strong> Communities enjoy a special status in <strong>the</strong> <strong>IEA</strong>,<br />
not only by virtue <strong>of</strong> <strong>the</strong>ir right to accede to <strong>the</strong> I.E.P. Agreement under Article<br />
72, but also as a result <strong>of</strong> <strong>the</strong> invitation extended to <strong>the</strong> EC Commission by <strong>the</strong><br />
Governing Board at its first meeting “to take part from now on in <strong>the</strong> work <strong>of</strong><br />
<strong>the</strong> various bodies <strong>of</strong> <strong>the</strong> Agency” [<strong>IEA</strong>/GB(74)9(1st Revision), Item 14(b)<br />
and Annex III]. That invitation was extended with specific reference to<br />
Supplementary Protocol No. 1 to <strong>the</strong> OECD Convention which states that <strong>the</strong><br />
Commission <strong>of</strong> <strong>the</strong> European Communities shall take part in <strong>the</strong> work <strong>of</strong> <strong>the</strong><br />
OECD. Pursuant to that invitation <strong>the</strong> Commission has regularly attended<br />
Board meetings and enjoyed <strong>the</strong> right to receive Board documents and to<br />
speak in Board meetings upon <strong>the</strong> Chairman’s invitation; however, it has not<br />
received <strong>the</strong> right to vote and has no obligation to make a financial<br />
contribution to <strong>the</strong> costs <strong>of</strong> operating <strong>the</strong> Agency. No case has been found<br />
where <strong>the</strong> Commission has acceded to decisions <strong>of</strong> <strong>the</strong> Governing Board, but<br />
that possibility is not excluded by any <strong>of</strong> <strong>the</strong> <strong>IEA</strong> governing texts. Of course<br />
<strong>the</strong> Commission is bound by <strong>the</strong> outcome <strong>of</strong> <strong>the</strong> meeting only if arrangements<br />
have been made to that effect, but <strong>the</strong> EC Member States are bound in <strong>the</strong><br />
same way as o<strong>the</strong>r <strong>IEA</strong> Members are bound by Governing Board actions. In<br />
sum, <strong>the</strong> role <strong>of</strong> <strong>the</strong> Commission might be characterized as going beyond a<br />
passive observer status in view <strong>of</strong> <strong>the</strong> regular and active participation <strong>of</strong> <strong>the</strong><br />
Commission in <strong>the</strong> work <strong>of</strong> <strong>the</strong> Agency on a broad, substantive basis.<br />
Although Norway is considered in most respects as a Member <strong>of</strong> <strong>the</strong><br />
<strong>IEA</strong>, it is not a formal Member in <strong>the</strong> sense <strong>of</strong> being a Contracting Party to<br />
<strong>the</strong> I.E.P. Agreement. Norway’s extensive but limited participation is fixed<br />
under a separate Agreement between <strong>the</strong> Agency and <strong>the</strong> Government <strong>of</strong><br />
Norway [See Chapter IV, Section A-3 above generally on <strong>the</strong> situation <strong>of</strong><br />
Norway] and under <strong>the</strong> Decision on Institutional Arrangements for <strong>the</strong><br />
Participation <strong>of</strong> Norway [<strong>IEA</strong>/GB(75)15, Annex IV], called <strong>the</strong> “Norway<br />
178
Decision”. Under those two instruments, Norway is certainly more than an<br />
observer in <strong>the</strong> <strong>IEA</strong>; indeed its status is close to that <strong>of</strong> a full Member.<br />
However, because <strong>of</strong> its particular juridical status, <strong>the</strong>re is provision for<br />
meeting participation by Norway as an “active observer”, although that<br />
designation has not been <strong>of</strong>ficially employed. Paragraph 1 <strong>of</strong> <strong>the</strong> Norway<br />
Decision provides this:<br />
Norway shall be entitled to participate, on <strong>the</strong> same basis as a<br />
Participating Country, in plenary and restricted organs <strong>of</strong> <strong>the</strong><br />
Agency, including <strong>the</strong> right to be represented, to participate in<br />
discussions, and to make proposals, in plenary or restricted<br />
meetings <strong>the</strong>re<strong>of</strong>, and <strong>the</strong> right to receive agendas and o<strong>the</strong>r<br />
documents for such meetings.<br />
Paragraph 2 <strong>of</strong> that Decision enables Norway to vote on questions arising<br />
under Chapters V through X <strong>of</strong> <strong>the</strong> I.E.P. Agreement and which require a<br />
majority, and paragraph 3 permits Norway to adhere to any o<strong>the</strong>r decision<br />
<strong>of</strong> <strong>the</strong> Governing Board. Hence it was a natural consequence that Norway<br />
should have <strong>the</strong> broad meeting participation rights set forth in <strong>the</strong> text<br />
quoted above.<br />
Ano<strong>the</strong>r instance <strong>of</strong> an established expectation is <strong>the</strong> admission to<br />
Board meetings <strong>of</strong> representatives <strong>of</strong> prospective new Members, and this from<br />
<strong>the</strong> time <strong>of</strong> <strong>the</strong> Board’s invitation to <strong>the</strong> new Member to accede to <strong>the</strong> I.E.P.<br />
Agreement until <strong>the</strong> accession formalities are completed. This has been done<br />
not on <strong>the</strong> basis <strong>of</strong> a formal decision, but by informal arrangement for all new<br />
Members. During that observer period <strong>the</strong>y too received all documents and<br />
enjoyed <strong>the</strong> right to attend selected meetings <strong>of</strong> <strong>IEA</strong> bodies (but not <strong>the</strong><br />
Budget Committee). In meetings <strong>the</strong>y attended, observers were accorded <strong>the</strong><br />
right to speak upon <strong>the</strong> Chairman’s invitation, but without <strong>the</strong> right to vote.<br />
At that stage <strong>the</strong> new Member was not obligated to make financial<br />
contributions. However, once <strong>the</strong> membership proceedings were completed<br />
<strong>the</strong> new Member was bound by all prior decisions <strong>of</strong> <strong>the</strong> Governing Board,<br />
including those made during <strong>the</strong> new Member’s period <strong>of</strong> participation as an<br />
observer in <strong>the</strong> circumstances described above.<br />
O<strong>the</strong>r than for <strong>the</strong> EC and for Norway, <strong>the</strong> admission <strong>of</strong> observers has<br />
been arranged on a case by case basis when <strong>the</strong>re have been particularly<br />
cogent reasons for doing so. At meetings where <strong>the</strong> advice <strong>of</strong> <strong>the</strong> oil<br />
Industry Advisory Board or <strong>the</strong> Coal Industry Advisory Board has been<br />
sought for presentation to <strong>the</strong> Board, a representative <strong>of</strong> those bodies has<br />
been invited to attend as an observer for <strong>the</strong> relevant agenda item only.<br />
179
During <strong>the</strong> 1990-1991 Gulf Crisis, Finland, France and Iceland, <strong>the</strong> <strong>the</strong>n<br />
remaining OECD countries which were not Members <strong>of</strong> <strong>the</strong> Agency, were<br />
invited to participate in <strong>the</strong> Board’s preparatory work for dealing with <strong>the</strong><br />
crisis, and <strong>the</strong>y <strong>the</strong>n joined in <strong>the</strong> <strong>IEA</strong>’s Co-ordinated Energy Emergency<br />
Response Contingency Plan adopted by <strong>the</strong> Board on 11 January 1991 and<br />
activated by <strong>the</strong> Executive Director on 17 January 1991. In such cases <strong>of</strong><br />
ad hoc participation for limited purposes, <strong>the</strong> observer received only <strong>the</strong><br />
documents relevant to <strong>the</strong> particular agenda item and was admitted only<br />
during <strong>the</strong> consideration <strong>of</strong> that subject.<br />
Here it should be recalled that in <strong>the</strong> Board’s 1984 Decision on Stocks<br />
and Supply Disruptions [<strong>IEA</strong>/GB(84)27, Annex I], <strong>the</strong>re is provision in<br />
paragraph 9 for consultations among Members, apart from <strong>the</strong> Governing<br />
Board meeting, to develop response proposals; that consultation is to be<br />
open to <strong>the</strong> OECD Member countries which are not <strong>IEA</strong> Members. <strong>The</strong><br />
results <strong>of</strong> <strong>the</strong> consultation are reported to <strong>the</strong> Governing Board which is to<br />
take <strong>the</strong>m into account in reaching its overall response decision. <strong>The</strong>re is no<br />
specific provision for those OECD Members to participate in <strong>the</strong> ensuing<br />
Governing Board deliberations as observers.<br />
11. Officers and Elections<br />
<strong>The</strong> <strong>of</strong>fices <strong>of</strong> Chairman and Vice-Chairmen <strong>of</strong> <strong>the</strong> Governing Board are<br />
established by a brief passage in Article 50.3 <strong>of</strong> <strong>the</strong> I.E.P. Agreement as<br />
follows:<br />
<strong>The</strong> Governing Board, acting by majority, shall elect its Chairman<br />
and Vice-Chairmen.<br />
That is <strong>the</strong> sole reference in <strong>the</strong> Agreement to those <strong>of</strong>ficers <strong>of</strong> <strong>the</strong> Governing<br />
Board.<br />
<strong>The</strong> role <strong>of</strong> <strong>the</strong> Chairman is to provide, in conjunction with <strong>the</strong><br />
Executive Director, policy and institutional leadership to <strong>the</strong> Agency, to act<br />
as a major public spokesman for <strong>the</strong> Board, to carry out requests by <strong>the</strong><br />
Board and to direct its meetings. In carrying out <strong>the</strong> responsibilities <strong>of</strong> that<br />
<strong>of</strong>fice, <strong>the</strong> Chairman acts much in <strong>the</strong> same way as <strong>the</strong> chairmen <strong>of</strong> <strong>the</strong><br />
governing bodies <strong>of</strong> o<strong>the</strong>r functional international organizations do. <strong>The</strong><br />
Chairman is in a unique position to take policy initiatives in <strong>the</strong> meeting<br />
process and through normal diplomatic means. In consultation with <strong>the</strong><br />
Executive Director, <strong>the</strong> Chairman is empowered to convene Board meetings<br />
when <strong>the</strong> meeting dates have been left open by <strong>the</strong> Board itself. Of course<br />
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<strong>the</strong> Chairman sets <strong>the</strong> tone <strong>of</strong> <strong>the</strong> meetings, guides <strong>the</strong> discussions, brings<br />
<strong>the</strong> weight <strong>of</strong> <strong>the</strong> <strong>of</strong>fice to bear on <strong>the</strong> process <strong>of</strong> reaching consensus, rules<br />
on procedural questions in <strong>the</strong> course <strong>of</strong> <strong>the</strong> meetings, summarizes <strong>the</strong><br />
outcome <strong>of</strong> <strong>the</strong> meeting on each agenda item as necessary and shares with<br />
<strong>the</strong> Executive Director responsibility for <strong>the</strong> overall success <strong>of</strong> <strong>the</strong> Board’s<br />
meetings.<br />
Governing Board Chairmen [See Appendix II, Officers <strong>of</strong> <strong>the</strong><br />
Governing Board at Ministerial and Official Level, Standing Groups and<br />
Committees] are elected as individuals, not as countries. For Ministerial<br />
Level meetings, a Minister is elected to serve as Chairman <strong>of</strong> a particular<br />
meeting. Chairmen <strong>of</strong> <strong>the</strong> Board at <strong>of</strong>ficial level have usually been chosen<br />
from among senior <strong>of</strong>ficials in ministries or government departments<br />
responsible for energy policy, frequently <strong>the</strong> representative <strong>of</strong> a Member<br />
with a large energy economy. Most <strong>of</strong>ten <strong>the</strong>y have served as <strong>the</strong> Head <strong>of</strong><br />
<strong>the</strong>ir Delegation to <strong>the</strong> Governing Board and thus before taking <strong>the</strong><br />
chairmanship <strong>the</strong>y were quite familiar with participants, Board functions<br />
and practices, and with Agency operations overall.<br />
Although <strong>the</strong>re are no rules governing <strong>the</strong> term <strong>of</strong> <strong>of</strong>fice, <strong>the</strong><br />
predominant practice has been for Ministerial Level Chairmen to function<br />
as such during <strong>the</strong> period <strong>of</strong> preparation <strong>of</strong> <strong>the</strong> Ministerial Level meeting,<br />
during <strong>the</strong> meeting itself and afterwards as required to complete <strong>the</strong><br />
Ministerial Level process. <strong>The</strong>y are not elected specifically for any fixed<br />
period, although a Ministerial Chairman has been known to see <strong>the</strong> policy<br />
and diplomatic functions <strong>of</strong> <strong>the</strong> <strong>of</strong>fice as possibly continuing until <strong>the</strong><br />
election <strong>of</strong> <strong>the</strong> next Ministerial Level Chairman, a view which has not been<br />
widely shared in <strong>the</strong> Agency. <strong>The</strong> term <strong>of</strong> <strong>of</strong>fice for <strong>the</strong> Chairman at <strong>of</strong>ficial<br />
level and for <strong>the</strong> <strong>of</strong>ficers <strong>of</strong> all <strong>IEA</strong> bodies is normally <strong>the</strong> calendar year, and<br />
it may be renewed.<br />
<strong>The</strong> Governing Board has not explicitly fixed <strong>the</strong> number <strong>of</strong> Vice-<br />
Chairmen <strong>of</strong> <strong>the</strong> Board at <strong>of</strong>ficial level, although <strong>the</strong> actual elections fix <strong>the</strong><br />
number tacitly. Often <strong>the</strong>re have been up to four Vice-Chairmen, one from<br />
North America, one from <strong>the</strong> Far East, one from a smaller energy economy<br />
and at times one from among <strong>the</strong> OECD Heads <strong>of</strong> Delegation. In <strong>the</strong><br />
absence <strong>of</strong> ano<strong>the</strong>r <strong>of</strong>ficer normally situated nearby, <strong>the</strong> latter individual<br />
has assured <strong>the</strong> more regular presence <strong>of</strong> a Vice-Chairman in Paris. <strong>The</strong><br />
formula is not at all a rigid one, and it has been adjusted as necessary to<br />
provide balance.<br />
As appears above in <strong>the</strong> quotation <strong>of</strong> Article 50.3, <strong>the</strong> Chairman and<br />
Vice-Chairmen are elected by “majority” in formal rule terms. In fact <strong>the</strong>re<br />
has never been a formal election procedure applied for <strong>the</strong> elections, for in<br />
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each case at Ministerial as well as at <strong>of</strong>ficial level <strong>the</strong> elections have been<br />
made by consensus. Under <strong>the</strong> formal vote rule <strong>of</strong> <strong>the</strong> I.E.P., “majority”<br />
means not an absolute majority, but ra<strong>the</strong>r an “I.E.P. majority” which,<br />
under <strong>the</strong> complex <strong>IEA</strong> voting system, consists <strong>of</strong> “60 per cent <strong>of</strong> <strong>the</strong> total<br />
combined voting weights and 50 per cent <strong>of</strong> <strong>the</strong> general voting weights cast”<br />
[Article 62.3; see Section 13(b) below]. <strong>The</strong> actual elections have been held<br />
normally at <strong>the</strong> informal Governing Board sessions conducted during breaks<br />
in <strong>the</strong> Board’s formal meetings, usually in connection with <strong>the</strong> last meeting<br />
<strong>of</strong> <strong>the</strong> year preceding <strong>the</strong> new terms <strong>of</strong> <strong>of</strong>fice or at <strong>the</strong> first one held in <strong>the</strong><br />
new year <strong>of</strong> <strong>the</strong> terms <strong>of</strong> <strong>of</strong>fice.<br />
<strong>The</strong> term <strong>of</strong> <strong>of</strong>fice for Governing Board <strong>of</strong>ficers, as well as for <strong>of</strong>ficers<br />
<strong>of</strong> <strong>the</strong> Standing Groups and <strong>the</strong> Committees, is normally <strong>the</strong> calendar year.<br />
This duration is indicated in <strong>the</strong> election Agenda item which is usually<br />
expressed with reference to a specific year: as in 1993 when <strong>the</strong> agenda item<br />
was entitled “Election <strong>of</strong> Officers for 1993”, and <strong>the</strong> ensuing Governing<br />
Board election item recording <strong>the</strong> outcome bore <strong>the</strong> same title [March 1993<br />
meeting, <strong>IEA</strong>/GB(93)11, Item 2]. Moreover, <strong>the</strong> practice has developed <strong>of</strong><br />
<strong>of</strong>ficers retaining <strong>the</strong>ir functions beyond <strong>the</strong> end <strong>of</strong> <strong>the</strong> calendar year when<br />
<strong>the</strong> Board is not ready to act on elections before <strong>the</strong> end <strong>of</strong> <strong>the</strong> year. In<br />
those cases <strong>the</strong> <strong>of</strong>ficers have served until <strong>the</strong>ir respective successors were<br />
elected. Sometimes this was expressly decided by <strong>the</strong> Governing Board<br />
[<strong>IEA</strong>/GB(80)4, Item 5(c); <strong>IEA</strong>/GB(77)60, Item 2(a)], while at o<strong>the</strong>r times it<br />
was done tacitly without a specific decision <strong>of</strong> <strong>the</strong> Board and without<br />
objection from Members. This interim procedure may be taken as an<br />
established practice without <strong>the</strong> need for an explicit decision by <strong>the</strong> Board<br />
on such prolongation.<br />
12. Agendas<br />
<strong>The</strong> Governing Board has not adopted specific rules governing its meeting<br />
agendas, preferring to leave agenda preparation decisions to <strong>the</strong> Secretariat<br />
and <strong>the</strong> Board Chairman. Agendas include items foreseen in <strong>IEA</strong><br />
instruments as well as new subjects and give Members adequate notice <strong>of</strong><br />
<strong>the</strong> items to be presented to <strong>the</strong> Board. A draft agenda for each meeting has<br />
been prepared and circulated by <strong>the</strong> Secretariat.<br />
Each draft agenda has listed <strong>the</strong> discussion items and identified <strong>the</strong><br />
action and information documents which are before <strong>the</strong> Board. For<br />
Ministerial Level meetings <strong>the</strong> draft agenda has been approved by <strong>the</strong><br />
Governing Board at <strong>of</strong>ficial level well in advance <strong>of</strong> <strong>the</strong> meeting. <strong>The</strong> draft<br />
agendas for meetings at <strong>of</strong>ficial level have been prepared and issued as far<br />
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in advance <strong>of</strong> <strong>the</strong> meeting as possible, usually at least two weeks in advance.<br />
In a few cases <strong>the</strong> agendas have been annotated to provide Delegations with<br />
fur<strong>the</strong>r information on <strong>the</strong> discussion items [See <strong>IEA</strong>/GB/A(78)1 and<br />
<strong>IEA</strong>/GB/A(92)4/ANN]. When late items were expected (for example new<br />
points arising from a Standing Group meeting held immediately before <strong>the</strong><br />
Board meeting), <strong>the</strong> draft agenda could be delayed until <strong>the</strong> new points<br />
were known; or if <strong>the</strong> document was already issued, a revision containing<br />
<strong>the</strong> new points could be distributed. In such cases as soon as practicable <strong>the</strong><br />
Secretariat notified Delegations informally prior to <strong>the</strong> issuance <strong>of</strong> <strong>the</strong> draft<br />
agenda or revision that this would occur. <strong>The</strong>se questions have been<br />
considered as matters <strong>of</strong> judgement left for decision by <strong>the</strong> Executive<br />
Director. Sometimes late items have been subsumed under <strong>the</strong> category <strong>of</strong><br />
“O<strong>the</strong>r Business”, and this was usually sufficient for formal points which<br />
were not apt to give rise to controversy. When those items have raised<br />
questions, it has not always been possible to reach agreement, with <strong>the</strong><br />
result that <strong>the</strong> discussion on that item would be resumed at a later meeting<br />
or <strong>the</strong> item would be submitted for decision by <strong>the</strong> written procedure when<br />
appropriate. While <strong>the</strong> problem <strong>of</strong> early issuance <strong>of</strong> draft agendas and<br />
o<strong>the</strong>r meeting documents has occasionally been <strong>the</strong> subject <strong>of</strong> discussion,<br />
Delegations have understood that in a operational agency like <strong>the</strong> <strong>IEA</strong> <strong>the</strong>se<br />
problems were bound to arise and have always been handled as<br />
expeditiously as possible under <strong>the</strong> circumstances. In recent years <strong>the</strong><br />
development <strong>of</strong> rapid document transmission technology has removed some<br />
<strong>of</strong> <strong>the</strong> earlier concerns and has permitted greater flexibility when necessary.<br />
Over <strong>the</strong> years <strong>the</strong>re has been only one known agenda related<br />
procedural suggestion by a Delegation which was adopted into <strong>IEA</strong> practice:<br />
<strong>the</strong> suggestion by some French speaking Delegations to have <strong>the</strong> draft<br />
agendas for <strong>of</strong>ficial level meetings issued in French as well as English so<br />
that <strong>the</strong>y might be more readily usable to a wider group <strong>of</strong> <strong>of</strong>ficials in<br />
administrations. <strong>The</strong> earlier draft agendas had appeared in English only,<br />
like most Board documents, but <strong>the</strong> Secretariat has since issued all agendas<br />
in <strong>the</strong> two languages. (For Ministerial Level meetings, this was not a<br />
problem, for all Ministerial documents are issued in English, French and<br />
German.)<br />
Most items on <strong>the</strong> draft agendas have been proposed by <strong>the</strong> Executive<br />
Director. Some were derived from earlier Board instructions for a particular<br />
item to be discussed at a designated meeting, <strong>of</strong>ten in <strong>the</strong> form <strong>of</strong> an<br />
instruction to return to an item “at <strong>the</strong> next meeting <strong>of</strong> <strong>the</strong> Governing<br />
Board”. Some items, such as elections <strong>of</strong> <strong>of</strong>ficers <strong>of</strong> <strong>the</strong> bodies <strong>of</strong> <strong>the</strong> Agency,<br />
<strong>the</strong> scale <strong>of</strong> contributions, Budgets, and <strong>the</strong> annual reports to <strong>the</strong> OECD<br />
183
Council, were mandated by <strong>the</strong> I.E.P. Agreement and must appear on <strong>the</strong><br />
agendas <strong>of</strong> meetings held at or about <strong>the</strong> meeting times which are now<br />
customary for those items, but no precise meeting dates were prescribed.<br />
<strong>The</strong> Chairman and any Member may propose items for <strong>the</strong> draft agendas<br />
ei<strong>the</strong>r orally in an earlier Board meeting or by letter addressed to <strong>the</strong><br />
Executive Director. Standing Groups and Committees also propose agenda<br />
items, usually in <strong>the</strong> form <strong>of</strong> reports prepared for consideration by <strong>the</strong><br />
Board. Additional items can be proposed by participants in <strong>the</strong> Governing<br />
Board meeting, particularly at <strong>the</strong> time when <strong>the</strong> Agenda is considered for<br />
adoption, but this is a relatively rare occurrence.<br />
It should also be noted that <strong>the</strong> <strong>IEA</strong> voting rule for adoption <strong>of</strong><br />
agendas is not specifically stated in <strong>the</strong> I.E.P. Agreement or o<strong>the</strong>r regulatory<br />
instrument unlike <strong>the</strong> OECD which provides in Rule 14 a) <strong>of</strong> its Rules <strong>of</strong><br />
Procedure that agendas be “adopted by a majority <strong>of</strong> Members represented<br />
on <strong>the</strong> body concerned and present”. For <strong>the</strong> <strong>IEA</strong> <strong>the</strong> applicable rule is<br />
found in I.E.P. Agreement Article 61.1(a) which makes majority voting<br />
applicable to, among o<strong>the</strong>r matters, “decisions on procedural questions”;<br />
this is also <strong>the</strong> voting rule for <strong>the</strong> adoption <strong>of</strong> rules <strong>of</strong> procedure [See Article<br />
50.2]. <strong>The</strong> “majority” required, it must be said, is not a simple majority <strong>of</strong><br />
Members present and voting, but <strong>the</strong> I.E.P. majority discussed in <strong>the</strong> Section<br />
below on voting. However, <strong>the</strong> majority voting rule for agendas has never<br />
been applied, for <strong>the</strong> Governing Board has always adopted its agendas by<br />
consensus and has never had to proceed to a formal vote on this question.<br />
13. Voting and Consensus<br />
<strong>The</strong> Agency’s voting rules set forth in <strong>the</strong> I.E.P. Agreement are among <strong>the</strong><br />
most complex and innovative <strong>of</strong> any international organization, in that <strong>the</strong>y<br />
establish two separate systems <strong>of</strong> voting weights assigned to <strong>the</strong> Members<br />
and four different voting formulations for unanimity, I.E.P. majority and two<br />
special majorities. Those provisions bear little if any resemblance to <strong>the</strong><br />
voting rules <strong>of</strong> any o<strong>the</strong>r international organization. Yet <strong>the</strong>se <strong>IEA</strong> rules<br />
have rarely been directly employed in <strong>the</strong> sense <strong>of</strong> having a recorded vote on<br />
an issue decided by <strong>the</strong> Governing Board. In <strong>the</strong> Agency’s first year or so,<br />
<strong>the</strong>re were a few cases in which a vote count was commenced by <strong>the</strong><br />
Chairman who enquired country by country about <strong>the</strong> Members’ votes.<br />
However, that process ended when <strong>the</strong> Chairman sensed midway through it<br />
that <strong>the</strong> sufficient majority favoured <strong>the</strong> proposal, and rarely has <strong>the</strong>re been<br />
a vote formally announced or recorded. In connection with <strong>the</strong> adoption <strong>of</strong><br />
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<strong>the</strong> Emergency Management Manual in 1976 a majority vote was recorded in<br />
a footnote to one paragraph <strong>of</strong> <strong>the</strong> Conclusions [<strong>IEA</strong>/GB(76)24, Item 3(a)]:<br />
This paragraph was adopted by a majority vote pursuant to<br />
Articles 6.4 and 62.3 <strong>of</strong> <strong>the</strong> I.E.P. Agreement in which all<br />
Participating Countries <strong>of</strong> <strong>the</strong> Agency voted in favour except<br />
Italy, which opposed it, New Zealand, which expressed a réserve<br />
d’attente, and Norway, which due to its special relationship<br />
with <strong>the</strong> Agency did not participate in <strong>the</strong> vote.<br />
In <strong>the</strong> early years <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong>re were also a few individual Member’s votes<br />
or abstentions noted at a Member’s request in <strong>the</strong> Governing Board meeting<br />
Conclusions, and a few cases in which <strong>the</strong> Board recorded an agreement on <strong>the</strong><br />
non-applicability <strong>of</strong> designated parts <strong>of</strong> a decision to particular Members.<br />
More recently in <strong>the</strong> December 1993 meeting <strong>of</strong> <strong>the</strong> Governing Board,<br />
<strong>the</strong>re was minority opposition to <strong>the</strong> adoption <strong>of</strong> parts <strong>of</strong> <strong>the</strong> draft<br />
Conclusions on <strong>the</strong> annual <strong>IEA</strong> Programme <strong>of</strong> Work and Budget for <strong>1994</strong>.<br />
In its Conclusions on this question [<strong>IEA</strong>/GB(93)65, Item 2], <strong>the</strong> Board:<br />
(b) noted <strong>the</strong> reminder by <strong>the</strong> Chairman <strong>of</strong> <strong>the</strong> Governing<br />
Board that <strong>the</strong> <strong>1994</strong> Budget <strong>of</strong> <strong>the</strong> Agency is to be adopted<br />
by a majority as defined in Article 62(3) <strong>of</strong> <strong>the</strong> Agreement<br />
on an International Energy Program;<br />
(c) noted <strong>the</strong> statements <strong>of</strong> <strong>the</strong> representatives <strong>of</strong> Australia,<br />
Canada and New Zealand that <strong>the</strong>y could not accept <strong>the</strong><br />
<strong>1994</strong> Budget as it was proposed, but also <strong>the</strong> statement <strong>of</strong><br />
<strong>the</strong> Chairman <strong>of</strong> <strong>the</strong> Governing Board that <strong>the</strong> requisite<br />
majority supported <strong>the</strong> <strong>1994</strong> Budget as proposed.<br />
Again <strong>the</strong> Chairman sensed that <strong>the</strong> requisite majority favoured <strong>the</strong><br />
adoption <strong>of</strong> <strong>the</strong> measure, and he announced that <strong>the</strong> Conclusions were<br />
adopted “by majority” without a formal vote or an explicit statement <strong>of</strong><br />
“yea or nay” from each Member. <strong>The</strong> Conclusions simply recorded that <strong>the</strong><br />
actions appearing in <strong>the</strong> paragraph in question were taken by <strong>the</strong> Board<br />
“acting by majority” [<strong>IEA</strong>/GB(93)65, Item 2(f)]. Aside from this and <strong>the</strong><br />
few o<strong>the</strong>r cases mentioned above, <strong>the</strong> elaborate <strong>IEA</strong> voting arrangements<br />
have not been applied directly by <strong>the</strong> Board or any o<strong>the</strong>r organ <strong>of</strong> <strong>the</strong><br />
Agency, although at times <strong>the</strong> rules have surely carried a discreet but<br />
powerful influence.<br />
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Instead <strong>of</strong> using <strong>the</strong> voting rules, <strong>the</strong> Governing Board has acted on <strong>the</strong><br />
basis <strong>of</strong> consensus. In <strong>the</strong> interest <strong>of</strong> <strong>the</strong> integrity and reliability <strong>of</strong> <strong>the</strong><br />
Emergency Sharing System and to maintain a confrontation free atmosphere<br />
generally in <strong>the</strong> Agency, it became necessary for <strong>the</strong> <strong>IEA</strong> to employ all<br />
available means to avoid situations in which disputes might arise under that<br />
System or during consideration <strong>of</strong> o<strong>the</strong>r issues. <strong>The</strong> most important <strong>of</strong> those<br />
means was <strong>the</strong> practice <strong>of</strong> substituting consensus for formal voting<br />
procedures (without amendment <strong>of</strong> <strong>the</strong> Agreement or o<strong>the</strong>r formal<br />
arrangement). Consensus reduced <strong>the</strong> possibilities <strong>of</strong> polarization and<br />
isolation <strong>of</strong> <strong>the</strong> minority, made workable compromises possible, and<br />
enhanced <strong>the</strong> atmosphere <strong>of</strong> co-operation in <strong>the</strong> general interest. <strong>The</strong><br />
successful application <strong>of</strong> <strong>the</strong> consensus procedure also provided a remarkable<br />
means for streng<strong>the</strong>ning institutional development overall.<br />
In practice <strong>the</strong> Governing Board has endeavoured to reach a consensus<br />
on virtually every agenda item. Typically, at <strong>the</strong> close <strong>of</strong> <strong>the</strong> Board’s discussion<br />
<strong>of</strong> a particular point, when <strong>the</strong> Chairman sensed that <strong>the</strong>re was majority<br />
support for a measure requiring majority, he announced his proposed<br />
Conclusions which were deemed accepted by consensus in <strong>the</strong> absence <strong>of</strong><br />
objection. On measures requiring unanimity, <strong>the</strong> Chairman proceeded in<br />
essentially <strong>the</strong> same fashion when he sensed no apparent objection. <strong>The</strong><br />
announced Conclusions were <strong>the</strong>n taken to represent <strong>the</strong> decision <strong>of</strong> <strong>the</strong> Board<br />
by consensus. Where <strong>the</strong>re was disagreement, <strong>the</strong> foregoing process as well as<br />
direct negotiations were undertaken until a consensus solution was found, at<br />
times even in later meetings. In majority vote cases, <strong>the</strong> disagreeing party or<br />
parties, if less than a sufficient number to block <strong>the</strong> majority, were persuaded<br />
to accept by consensus what would be unavoidable if <strong>the</strong> Board went to a vote.<br />
In cases where <strong>the</strong> minority was sufficient to block <strong>the</strong> action and if successive<br />
efforts failed to bring about a consensus or produce a majority, <strong>the</strong> matter<br />
eventually had to be deferred or dropped. In cases requiring unanimity, ei<strong>the</strong>r<br />
<strong>the</strong> disagreeing party or parties were brought around to <strong>the</strong> dominant view, or<br />
arrangements were made to permit <strong>the</strong>m to opt out <strong>of</strong> <strong>the</strong> decision by<br />
agreement <strong>of</strong> <strong>the</strong> o<strong>the</strong>rs under Article 61.2(a), or <strong>the</strong> matter again eventually<br />
had to be deferred or dropped. In <strong>the</strong>se difficult situations <strong>the</strong> spirit <strong>of</strong> <strong>IEA</strong> cooperation<br />
usually prevailed, and an appropriate accommodation was found.<br />
Consensus, as applied in <strong>the</strong> <strong>IEA</strong>, has been understood to mean <strong>the</strong><br />
absence <strong>of</strong> a serious objection or reservation which would lead a Delegate to<br />
insist upon a formal vote (without hope for accommodation) at <strong>the</strong> moment<br />
when <strong>the</strong> Chairman announces his proposed meeting conclusions. This<br />
corresponds to <strong>the</strong> Rules <strong>of</strong> Procedure <strong>of</strong> <strong>the</strong> Conference on Security and<br />
Co-operation in Europe <strong>of</strong> <strong>1974</strong> (<strong>the</strong> Helsinki Process) which provided <strong>the</strong><br />
186
following definition in paragraph 4: “Consensus shall be understood to<br />
mean <strong>the</strong> absence <strong>of</strong> any objection expressed by a Representative and<br />
submitted by him as constituting an obstacle to <strong>the</strong> taking <strong>of</strong> <strong>the</strong> decision in<br />
question” [Rules <strong>of</strong> Procedure <strong>of</strong> <strong>the</strong> Final Recommendations <strong>of</strong> <strong>the</strong><br />
Helsinki Consultations, Helsinki, 8 June 1973].<br />
Viewed in this light, <strong>the</strong> importance <strong>of</strong> <strong>the</strong> underlying “passive” or<br />
“unapplied” <strong>IEA</strong> formal voting system should not be underestimated. It<br />
does represent <strong>the</strong> law <strong>of</strong> <strong>the</strong> Agency on <strong>the</strong> subject <strong>of</strong> voting. <strong>The</strong><br />
institutional force <strong>of</strong> none <strong>of</strong> <strong>the</strong> voting rules has been lost through <strong>the</strong> use<br />
<strong>of</strong> consensus. Each Member remains entitled to invoke <strong>the</strong> applicable<br />
voting rule at any moment it might find convenient. On issues requiring<br />
unanimity under <strong>the</strong> I.E.P. Agreement, each Member must remain quite free<br />
to decline to be bound by measures it does not support. On majority vote<br />
questions, each Member must remain equally free to call for an announced<br />
and recorded vote if it so wishes. Since those rights remain fully viable<br />
under <strong>the</strong> <strong>IEA</strong> voting system, <strong>the</strong> system can be invoked at any time and<br />
must <strong>the</strong>n be applied, however strongly <strong>the</strong> tradition <strong>of</strong> consensus and cooperation<br />
might militate against it. Never<strong>the</strong>less, a Member which might<br />
request a vote risks disturbing <strong>the</strong> consensus procedure that has proven to<br />
make such a valuable contribution to <strong>IEA</strong> harmony and effectiveness.<br />
<strong>The</strong> importance <strong>of</strong> <strong>the</strong> voting system persists for o<strong>the</strong>r reasons as well. As<br />
<strong>the</strong> foregoing discussion suggests, it will be clear that <strong>the</strong> system plays a tacit role<br />
even when it is not specifically invoked. Since <strong>the</strong> Members know when<br />
unanimity or majority voting rules are applicable, <strong>the</strong>y do not persist in positions<br />
which are unlikely to attract support sufficient to meet <strong>the</strong> requirements <strong>of</strong> <strong>the</strong><br />
applicable rule. Thus <strong>the</strong>re is no need for a Member specifically to invoke a rule<br />
for it to be applied tacitly by <strong>the</strong> Chairman or o<strong>the</strong>r Members. This process helps<br />
<strong>the</strong> Agency avoid or minimize <strong>the</strong> open disagreements, polarization and<br />
confrontation which at times have been observed in o<strong>the</strong>r organizations.<br />
Ano<strong>the</strong>r important element <strong>of</strong> <strong>the</strong> voting system is that it constitutes<br />
<strong>the</strong> indispensable link between <strong>the</strong> Members’ political, economic and social<br />
views on <strong>the</strong> one hand, and <strong>the</strong> Agency’s formal decisions on <strong>the</strong> o<strong>the</strong>r. <strong>The</strong><br />
voting rules must be satisfied in one fashion or ano<strong>the</strong>r for <strong>the</strong> Agency to be<br />
able to act as required by <strong>the</strong> I.E.P. Agreement or upon proposals <strong>of</strong><br />
Members or <strong>the</strong> Secretariat. If <strong>the</strong> Agency should fail to do so by virtue <strong>of</strong><br />
openly divided votes and concomitant procedural controversy, <strong>the</strong>re could<br />
be a substantial risk <strong>of</strong> <strong>the</strong> Agency’s losing its credibility as a reliable oil<br />
emergency response organization and as an effective centre for general cooperation<br />
on international issues <strong>of</strong> energy policy and operations. Thus it is<br />
understandable that such strong efforts have been made in <strong>the</strong> Agency to<br />
187
ensure that <strong>the</strong> voting system is employed smoothly and in a constructive<br />
manner to help bring about agreement among <strong>the</strong> Members.<br />
A few words may now be said about <strong>the</strong> origin, structure and application <strong>of</strong><br />
each <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s four formal voting rules: unanimity, I.E.P. majority, First Special<br />
Majority and Second Special Majority. Since <strong>the</strong> technical voting rules set forth in<br />
<strong>the</strong> I.E.P. Agreement change when Norway participates in Governing Board actions,<br />
<strong>the</strong> voting rules applicable when Norway participates will also be considered.<br />
(a) Unanimity<br />
Unanimity is clearly <strong>the</strong> simplest <strong>of</strong> <strong>the</strong> four <strong>IEA</strong> formal voting rules.<br />
Article 62.1 states that<br />
Unanimity shall require all <strong>of</strong> <strong>the</strong> votes <strong>of</strong> <strong>the</strong> Participating Countries<br />
present and voting. Countries abstaining shall be considered as not voting.<br />
“Unanimity” thus means <strong>the</strong> positive votes <strong>of</strong> all Members present;<br />
abstentions do not defeat unanimity. In o<strong>the</strong>r words, a negative vote has <strong>the</strong><br />
effect <strong>of</strong> a veto, but absence or abstention would not.<br />
Unanimity is required in all cases expressly providing for it in <strong>the</strong> I.E.P.<br />
Agreement, as well as for all decisions which impose new obligations not<br />
already specified in this Agreement. It also applies to a category <strong>of</strong> “o<strong>the</strong>r<br />
decisions” for which <strong>the</strong>re is no provision for decision by majority or special<br />
majority in <strong>the</strong> Agreement, <strong>the</strong> “o<strong>the</strong>r decisions” category providing <strong>the</strong> fallback<br />
rule to be applied in a fail-safe fashion where <strong>the</strong> Agreement is silent. In<br />
<strong>the</strong> Agreement, unanimity is specified for particular subjects only in a few cases:<br />
■<br />
■<br />
■<br />
■<br />
■<br />
■<br />
Article 22: activation <strong>of</strong> appropriate emergency measures not<br />
provided for in <strong>the</strong> Agreement.<br />
Article 27.1(j): additions to <strong>the</strong> list <strong>of</strong> subjects relating to oil<br />
companies operating within <strong>the</strong>ir jurisdictions on which Members are<br />
to report information to <strong>the</strong> Secretariat.<br />
Articles 62.5 and 62.6: changes in voting weights referred to in<br />
Article 62.2 upon changes <strong>of</strong> membership or review <strong>of</strong> <strong>the</strong> number<br />
and distribution <strong>of</strong> <strong>the</strong> voting weights.<br />
Article 64.1: changes in <strong>the</strong> scale <strong>of</strong> contributions to <strong>the</strong> <strong>IEA</strong>.<br />
Article 73: amendment <strong>of</strong> <strong>the</strong> I.E.P. Agreement.<br />
Annex, Article 7: changes in <strong>the</strong> definition <strong>of</strong> <strong>the</strong> reference period<br />
mentioned in Article 2, paragraph 1 <strong>of</strong> <strong>the</strong> Agreement, concerning <strong>the</strong><br />
maintenance <strong>of</strong> emergency reserves.<br />
188
Over <strong>the</strong> years <strong>the</strong> Board has taken a number <strong>of</strong> decisions to which <strong>the</strong> rule<br />
<strong>of</strong> unanimity was applicable. New commitment decisions included, for<br />
example, <strong>the</strong> Long-Term Co-operation Programme <strong>of</strong> 1976, and <strong>the</strong> Gulf<br />
Crisis Co-ordinated Energy Emergency Response Contingency Plan <strong>of</strong> 1991.<br />
<strong>The</strong>re have also been changes in voting weights upon <strong>the</strong> admission <strong>of</strong> new<br />
Members and o<strong>the</strong>r amendments to <strong>the</strong> I.E.P. Agreement. Although<br />
unanimity was required in each <strong>of</strong> <strong>the</strong> foregoing cases, <strong>the</strong>re was no<br />
discussion <strong>of</strong> <strong>the</strong> voting rule in <strong>the</strong> Governing Board and <strong>the</strong>re was no<br />
reference to <strong>the</strong> applicable voting rule or explicit finding <strong>of</strong> unanimity<br />
recorded in <strong>the</strong> decisions or relevant Board conclusions. Indeed <strong>the</strong> record <strong>of</strong><br />
each <strong>of</strong> those decisions is silent on <strong>the</strong> subject <strong>of</strong> <strong>the</strong> applicable voting rule.<br />
Although <strong>the</strong> principle <strong>of</strong> “one country one vote” was abandoned in<br />
<strong>the</strong> I.E.P. Majority and <strong>the</strong> First Special Majority, as will be seen below, it<br />
was retained in all <strong>of</strong> <strong>the</strong> cases requiring unanimity. That principle was<br />
derived from <strong>the</strong> traditional doctrine <strong>of</strong> “sovereign equality <strong>of</strong> states” which<br />
is applied almost uniformly in <strong>the</strong> OECD and for many key decisions in a<br />
number <strong>of</strong> o<strong>the</strong>r international organizations. It reflects <strong>the</strong> importance<br />
Members attach to <strong>the</strong> retention <strong>of</strong> sovereign authority over those particular<br />
matters specified and over new international obligations. Although in <strong>the</strong><br />
<strong>IEA</strong> sovereign authority is safeguarded in <strong>the</strong> cases calling for “unanimity”,<br />
it is clear that <strong>the</strong> founders wished to limit <strong>the</strong> cases in which a Member<br />
might enjoy a power <strong>of</strong> veto over Governing Board action. [<strong>The</strong> <strong>IEA</strong><br />
founders’ intentions concerning <strong>the</strong> voting system appear in <strong>the</strong> “Secretariat<br />
Notes on IEP Voting Concepts” attached to <strong>the</strong> Executive Director’s letter <strong>of</strong><br />
25 February 1991 to Heads <strong>of</strong> Delegations <strong>of</strong> <strong>IEA</strong> Participating Countries,<br />
<strong>IEA</strong>/OLC(91)51; parallel background information was circulated by <strong>the</strong><br />
Executive Director to Heads <strong>of</strong> <strong>IEA</strong> Delegations in 1980, <strong>IEA</strong>/ED/80.107].<br />
(b) I.E.P. Majority<br />
For <strong>the</strong> I.E.P. majority, which is a complex ra<strong>the</strong>r than a simple majority,<br />
<strong>the</strong> rules become somewhat more difficult to follow, chiefly on account <strong>of</strong><br />
<strong>the</strong> weighted voting. Stated in abbreviated form, <strong>the</strong> I.E.P. majority<br />
requires <strong>the</strong> affirmative vote <strong>of</strong> at least one-half <strong>of</strong> <strong>the</strong> Members voting,<br />
provided that those Members hold at least 60 per cent <strong>of</strong> <strong>the</strong> total voting<br />
power (<strong>the</strong> combined voting weights) explained below. <strong>The</strong> brief text on<br />
majority is set forth in Article 62.3 :<br />
Majority shall require 60 per cent <strong>of</strong> <strong>the</strong> total combined voting<br />
weights and 50 per cent <strong>of</strong> <strong>the</strong> general voting weights cast.<br />
189
Three “general voting weights” (GVW) were assigned equally to each<br />
Member country in order to provide a measure <strong>of</strong> equality among all<br />
Members. Thus when fifty per cent <strong>of</strong> <strong>the</strong> GVW are cast, it simply means<br />
that one-half <strong>of</strong> <strong>the</strong> Members have voted. This would normally mean<br />
twelve out <strong>of</strong> <strong>the</strong> twenty-three Member countries not counting Norway<br />
(<strong>the</strong> effect on voting <strong>of</strong> Norway’s special status is discussed below in this<br />
Section). When <strong>the</strong> necessary majority gives favourable support to a<br />
Board action, it is clear that <strong>the</strong> adopted decision is binding upon <strong>the</strong><br />
entire membership, including a dissenting minority. That result is not<br />
only inherent in <strong>the</strong> concept <strong>of</strong> majority voting; in <strong>the</strong> <strong>IEA</strong> it follows<br />
directly from Article 52.1 which states that “. . . decisions adopted<br />
pursuant to this Agreement by <strong>the</strong> Governing Board or any o<strong>the</strong>r organ by<br />
delegation from <strong>the</strong> Board shall be binding on Participating Countries”<br />
[Emphasis added].<br />
“Majority” has been applicable in many Governing Board decisions<br />
actually taken. In addition to <strong>the</strong> cases in which majority is expressly<br />
provided for in <strong>the</strong> Agreement, Article 61.1 divides majority vote questions<br />
into three categories:<br />
■<br />
■<br />
■<br />
decisions on <strong>the</strong> management <strong>of</strong> <strong>the</strong> Program, including decisions<br />
applying provisions <strong>of</strong> this Agreement which already impose specific<br />
obligations on Participating Countries;<br />
decisions on procedural questions;<br />
recommendations.<br />
In addition to <strong>the</strong> application <strong>of</strong> <strong>the</strong> I.E.P. Agreement to decisions on<br />
management, procedure and recommendations, virtually every Chapter <strong>of</strong><br />
<strong>the</strong> Agreement specifies particular decisions, too numerous to enumerate,<br />
which are to be made by majority. This is true even for <strong>the</strong> Emergency<br />
Sharing System Chapters which reserve certain especially sensitive matters<br />
to special majorities or unanimity. Also included are most <strong>of</strong> <strong>the</strong> decisions<br />
concerning <strong>the</strong> development <strong>of</strong> <strong>the</strong> Emergency Sharing and Information<br />
System, <strong>the</strong> framework for consultation with oil companies, and<br />
institutional matters such as elections, delegations <strong>of</strong> power, creation <strong>of</strong><br />
new organs, establishment and functioning <strong>of</strong> <strong>the</strong> Secretariat, adoption <strong>of</strong><br />
<strong>the</strong> Budgets as well as o<strong>the</strong>r financial matters and new membership<br />
invitations.<br />
<strong>The</strong> structure <strong>of</strong> <strong>the</strong> I.E.P. majority voting rules must be reviewed<br />
with reference to <strong>the</strong> voting weight chart contained in Article 62.2 <strong>of</strong> <strong>the</strong><br />
I.E.P. Agreement as amended in 1992 as follows:<br />
190
Article 62.2<br />
When majority or special majority is required, <strong>the</strong> Participating<br />
Countries shall have <strong>the</strong> following voting weights:<br />
General<br />
voting<br />
weights<br />
Oil<br />
Consumption<br />
voting<br />
weights<br />
Combined<br />
voting<br />
weights<br />
Australia<br />
Austria<br />
Belgium<br />
Canada<br />
Denmark<br />
Finland<br />
France<br />
Germany<br />
Greece<br />
Ireland<br />
Italy<br />
Japan<br />
Luxembourg<br />
<strong>The</strong> Ne<strong>the</strong>rlands<br />
New Zealand<br />
Portugal<br />
Spain<br />
Sweden<br />
Switzerland<br />
Turkey<br />
United Kingdom<br />
United States<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
1<br />
1<br />
1<br />
5<br />
1<br />
1<br />
6<br />
8<br />
0<br />
0<br />
5<br />
14<br />
0<br />
1<br />
0<br />
0<br />
2<br />
2<br />
1<br />
1<br />
6<br />
44<br />
4<br />
4<br />
4<br />
8<br />
4<br />
4<br />
9<br />
11<br />
3<br />
3<br />
8<br />
17<br />
3<br />
4<br />
3<br />
3<br />
5<br />
5<br />
4<br />
4<br />
9<br />
47<br />
Totals<br />
With Norway<br />
66<br />
3<br />
100<br />
0<br />
166<br />
3<br />
Totals with Norway<br />
69<br />
100<br />
169<br />
In adopting those voting arrangements, <strong>the</strong> <strong>IEA</strong> departed from <strong>the</strong><br />
traditional principle <strong>of</strong> “one country one vote” which could not be applied in<br />
<strong>the</strong> Agency because it failed to reflect <strong>the</strong> different magnitude <strong>of</strong> <strong>the</strong> interests<br />
<strong>of</strong> Members in <strong>the</strong> decisions to be taken in <strong>the</strong> Agency. Nor could it reflect<br />
<strong>the</strong> relative ability <strong>of</strong> Agency countries to shape <strong>the</strong> actions that <strong>the</strong>y might<br />
take individually if <strong>the</strong> Agency had not been established. Hence a system <strong>of</strong><br />
voting weights designed to reflect those considerations was devised.<br />
191
<strong>The</strong> voting weights employed in <strong>the</strong> <strong>IEA</strong> for <strong>the</strong> I.E.P. majority and<br />
<strong>the</strong> First Special Majority reflect two major considerations: (l) an element <strong>of</strong><br />
equality, and (2) an element <strong>of</strong> relative oil consumption. <strong>The</strong> juridical<br />
equality <strong>of</strong> each Member <strong>of</strong> <strong>the</strong> Agency is reflected in <strong>the</strong> general voting<br />
weight (GVW) schedule in <strong>the</strong> first numbered column <strong>of</strong> Article 62.2 above,<br />
in which three weights are allocated equally to each Member whatever <strong>the</strong><br />
size <strong>of</strong> its economy or <strong>the</strong> importance <strong>of</strong> its oil consumption. That provides<br />
an equal minimum voting strength for each Member, amounting in <strong>the</strong><br />
aggregate to about forty per cent <strong>of</strong> <strong>the</strong> total voting weights. <strong>The</strong> totals for<br />
each Member are called combined voting weights (CVW) and appear in <strong>the</strong><br />
last column <strong>of</strong> <strong>the</strong> chart; <strong>the</strong>y reflect <strong>the</strong> oil consumption element as well.<br />
<strong>The</strong>y represent in each case <strong>the</strong> sum <strong>of</strong> each Member’s general voting<br />
weights (GVW) and oil consumption voting weights (OVW).<br />
Each Member’s oil consumption is represented in a separate scale <strong>of</strong> oil<br />
consumption voting weights (OVW), <strong>the</strong> second numbered column in Article<br />
62.2, on a proportionate basis. <strong>The</strong> OVW were based upon a calculation<br />
which first considered each Member’s consumption <strong>of</strong> oil products in 1973<br />
(excluding bunkers). Those numbers were converted in each case to a<br />
percentage figure which represented each country’s proportion <strong>of</strong> <strong>the</strong> oil<br />
consumption <strong>of</strong> <strong>the</strong> group as a whole. <strong>The</strong> resulting percentage figures were<br />
<strong>the</strong>n rounded to <strong>the</strong> nearest whole number and adjusted to 100 by<br />
subtracting one OVW for <strong>the</strong> country with <strong>the</strong> percentage figure fur<strong>the</strong>st<br />
removed from <strong>the</strong> next whole number or by adding one OVW for <strong>the</strong> country<br />
closest to <strong>the</strong> whole number, as required. That calculation led to a total oil<br />
consumption voting weight (OVW) <strong>of</strong> 100 distributed on a proportionate<br />
basis among <strong>IEA</strong> Members. This calculation process, beginning with <strong>the</strong><br />
sixteen founding Members <strong>of</strong> <strong>the</strong> Agency, has been repeated with <strong>the</strong><br />
necessary adjustments upon <strong>the</strong> admission <strong>of</strong> each new Member, leading to<br />
<strong>the</strong> current text <strong>of</strong> Article 62.2 above, upon <strong>the</strong> admission <strong>of</strong> France in 1992.<br />
<strong>The</strong> 1973 oil consumption values adopted initially in <strong>1974</strong> (as <strong>the</strong><br />
latest <strong>the</strong>n available) still provide <strong>the</strong> statistical basis for <strong>the</strong>se calculations.<br />
Although Article 62.6 foresees periodic reviews and amendments in<br />
consequence <strong>of</strong> changes in Members’ oil consumption since 1973, <strong>the</strong>re has<br />
never been a request for <strong>the</strong> review, and none has taken place <strong>of</strong>ficially.<br />
From time to time <strong>the</strong> Secretariat has informally recalculated <strong>the</strong> OVW on<br />
<strong>the</strong> basis <strong>of</strong> updated numbers to see whe<strong>the</strong>r significant changes have<br />
occurred, but so far none has seemed sufficiently sizeable to warrant an<br />
<strong>of</strong>ficial review. Members too, it should be noted, have doubtless preferred to<br />
keep <strong>the</strong> whole question <strong>of</strong> formal voting in <strong>the</strong> background. Had <strong>the</strong><br />
Board been using a formal majority vote procedure with updated OVW, it is<br />
192
not believed that any applicable oil consumption voting weight changes<br />
would have altered any decision <strong>of</strong> <strong>the</strong> Governing Board.<br />
<strong>The</strong>re were specific objectives reflected in <strong>the</strong> particular requirements <strong>of</strong><br />
<strong>the</strong> I.E.P. majority, but not stated in <strong>the</strong> Agreement. Sixty per cent <strong>of</strong> <strong>the</strong><br />
combined voting weights (CVW) translates into 102 CVW (101.4 out <strong>of</strong> a<br />
total <strong>of</strong> 169) held by at least 50 per cent (or twelve) Members when <strong>the</strong>y all<br />
vote. That formulation was intended to reflect <strong>the</strong> intentions <strong>of</strong> <strong>the</strong> framers <strong>of</strong><br />
<strong>the</strong> I.E.P. Agreement who wished to ensure that, in <strong>the</strong> balance between <strong>the</strong><br />
European Communities’ Member States as a group and <strong>the</strong> United States,<br />
nei<strong>the</strong>r would be able alone to command a majority or block a majority.<br />
Although <strong>the</strong> EC now includes <strong>the</strong> minimum number <strong>of</strong> countries for <strong>the</strong><br />
I.E.P. majority (twelve Member States), <strong>the</strong> EC countries’ total CVW would not<br />
reach <strong>the</strong> required level <strong>of</strong> 102; indeed <strong>the</strong> maximum it could currently reach<br />
would be 66 CVW, which means that o<strong>the</strong>r countries’ support would be required,<br />
<strong>the</strong> exact number depending upon <strong>the</strong> CVW <strong>of</strong> <strong>the</strong> o<strong>the</strong>rs. Even with <strong>the</strong> future<br />
addition <strong>of</strong> all those <strong>IEA</strong> Members which, at <strong>the</strong> time <strong>of</strong> this writing, are engaged<br />
in <strong>the</strong> process <strong>of</strong> joining <strong>the</strong> EC, <strong>the</strong> EC Member States would not <strong>the</strong>n command<br />
in <strong>the</strong> aggregate <strong>the</strong> necessary 102 CVW. Yet <strong>the</strong> United States is in a weaker<br />
position than <strong>the</strong> EC, because <strong>the</strong> United States could never alone attain a<br />
majority, since it constitutes by itself only one <strong>of</strong> <strong>the</strong> required twelve countries.<br />
<strong>The</strong> United States would always need at least eleven o<strong>the</strong>r countries to join it to<br />
reach <strong>the</strong> I.E.P majority, while <strong>the</strong> EC would need fewer o<strong>the</strong>r countries.<br />
<strong>The</strong> founders’ o<strong>the</strong>r intention concerning balance in <strong>the</strong> majority<br />
voting system was to ensure that nei<strong>the</strong>r <strong>the</strong> EC Member States nor United<br />
States should be enabled, acting alone, to block a majority. A blocking<br />
majority could be achieved by a group composed <strong>of</strong> at least one-half <strong>of</strong> <strong>the</strong><br />
total Members plus one, or by 40 per cent <strong>of</strong> <strong>the</strong> CVW plus one, <strong>the</strong>reby<br />
rendering it impossible for <strong>the</strong> o<strong>the</strong>rs to meet <strong>the</strong> I.E.P. majority definition.<br />
In <strong>the</strong> light <strong>of</strong> <strong>the</strong> evolution <strong>of</strong> <strong>the</strong> <strong>IEA</strong> as well as EC membership, <strong>the</strong><br />
foregoing questions have remained under review in <strong>the</strong> Agency in order to<br />
ensure that <strong>the</strong> founders’ intentions continue to be respected.<br />
(c) First Special Majority<br />
In addition to <strong>the</strong> I.E.P. majority concept, <strong>the</strong>re are two I.E.P. “Special<br />
Majorities” which require greater support, for a few important questions<br />
under <strong>the</strong> Emergency Sharing System. <strong>The</strong>y appear in I.E.P. Agreement<br />
Article 62.4 as “Special Majority” with two different voting formulas<br />
and descriptions <strong>of</strong> <strong>the</strong> decisions to which <strong>the</strong>y apply, separated in<br />
sub-paragraphs (a) and (b) <strong>of</strong> paragraph 4. To simplify references, <strong>the</strong><br />
193
sub-paragraph (a) voting formula is designated here as “First Special<br />
Majority”, and <strong>the</strong> sub-paragraph (b) formula as “Second Special Majority”,<br />
although those formulations do not appear as such in <strong>the</strong> Agreement.<br />
Simply stated, <strong>the</strong> First Special Majority is similar to <strong>the</strong> I.E.P.<br />
“majority”, discussed above, but it is more demanding. <strong>The</strong> First Special<br />
Majority requires <strong>the</strong> affirmative vote not <strong>of</strong> one-half <strong>of</strong> <strong>the</strong> twenty-three<br />
Members, but ra<strong>the</strong>r seventeen <strong>of</strong> <strong>the</strong>m (or about 75 per cent <strong>of</strong> <strong>the</strong> entire<br />
membership, not merely 75 per cent <strong>of</strong> those voting). This majority is<br />
stated in Article 62.4(a) <strong>of</strong> <strong>the</strong> Agreement as:<br />
(a) 60 per cent <strong>of</strong> <strong>the</strong> total combined voting weights and<br />
50 general voting weights . . . .<br />
<strong>The</strong> few cases to which <strong>the</strong> First Special Majority applies are enumerated in<br />
Article 62.4(a). <strong>The</strong>y are: decisions to increase <strong>the</strong> emergency reserve<br />
commitment (Article 2.2), decisions not to activate <strong>the</strong> general trigger (in<br />
cases <strong>of</strong> an oil supply shortfall suffered by <strong>the</strong> group, Article 19.3), decisions<br />
on <strong>the</strong> measures required under Article <strong>20</strong>.3 in extended emergencies,<br />
decisions to maintain emergency measures under Article 23.3 and decisions<br />
to deactivate <strong>the</strong> general trigger (Article 24). <strong>The</strong> only decisions actually<br />
taken under <strong>the</strong> First Special Majority have been those on <strong>the</strong> increase <strong>of</strong> <strong>the</strong><br />
emergency reserve commitment pursuant to Article 2.2 (from 60 to 90 days);<br />
in that decision, it should be noted, <strong>the</strong>re was no reference to <strong>the</strong> voting rule<br />
or to <strong>the</strong> specific finding <strong>of</strong> <strong>the</strong> requisite majority [<strong>IEA</strong>/GB(76)53, Item<br />
2(b)]. <strong>The</strong> o<strong>the</strong>r kinds <strong>of</strong> First Special Majority decisions have not been<br />
necessary because, up to <strong>the</strong> present time, <strong>the</strong>re has not been a Secretariat<br />
“finding” or Governing Board decision to begin <strong>the</strong> emergency sharing<br />
process to which that Special Majority would apply.<br />
For both Special Majorities <strong>the</strong> underlying concepts were altoge<strong>the</strong>r<br />
different from those <strong>of</strong> <strong>the</strong> o<strong>the</strong>r I.E.P. voting rules and <strong>the</strong>y have had to be<br />
adjusted to maintain <strong>the</strong> original intention in <strong>the</strong> course <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
membership changes. <strong>The</strong> principal role <strong>of</strong> <strong>the</strong> First Special Majority was<br />
to protect <strong>the</strong> Secretariat’s general trigger finding, and <strong>the</strong> high majority <strong>of</strong><br />
about three-quarters <strong>of</strong> <strong>the</strong> Members was required to reverse it. <strong>The</strong> trigger<br />
is thus protected by a rule which ensures its integrity unless approximately<br />
75 per cent <strong>of</strong> <strong>the</strong> Members (currently seventeen Members) holding at least<br />
60 per cent <strong>of</strong> <strong>the</strong> CVW register <strong>the</strong>ir opposition to it. In effect that means<br />
that only <strong>the</strong> o<strong>the</strong>r 25 per cent <strong>of</strong> <strong>the</strong> Members plus one would be necessary<br />
to block <strong>the</strong> reversing action in <strong>the</strong> Board; or, said differently, 25 per cent <strong>of</strong><br />
<strong>the</strong> Members plus one Member can protect <strong>the</strong> trigger against <strong>the</strong> rest <strong>of</strong> <strong>the</strong><br />
194
membership. This was part <strong>of</strong> <strong>the</strong> non-political approach to <strong>the</strong> oil<br />
emergency trigger finding. <strong>The</strong> finding would be made by <strong>the</strong> Secretariat on<br />
<strong>the</strong> basis <strong>of</strong> factual ra<strong>the</strong>r than political determinations. While <strong>the</strong>re would<br />
remain <strong>the</strong> possibility <strong>of</strong> political reversal, that could occur only with <strong>the</strong><br />
support <strong>of</strong> a very large majority (75 per cent) <strong>of</strong> <strong>the</strong> Members. <strong>The</strong> intention<br />
underlying this majority was that nei<strong>the</strong>r <strong>the</strong> EC countries as a group nor <strong>the</strong><br />
United States would be able to block <strong>the</strong> general trigger without substantial<br />
support from o<strong>the</strong>r Members, and that clearly remains <strong>the</strong> case today with<br />
seventeen Members’ votes being required. While <strong>the</strong> EC countries could<br />
prevent <strong>the</strong> blocking action from taking place and thus ensure <strong>the</strong> protection<br />
<strong>of</strong> <strong>the</strong> trigger finding without support from o<strong>the</strong>rs, <strong>the</strong> United States would<br />
need a number <strong>of</strong> o<strong>the</strong>r Members to join it to prevent <strong>the</strong> blocking action.<br />
Under present membership numbers, any six Members joining toge<strong>the</strong>r could<br />
prevent blocking action. In sum, <strong>the</strong> seventeen Members required to block<br />
constitute a large majority which may be difficult to obtain in cases <strong>of</strong><br />
disagreement. If that majority is not obtained, <strong>the</strong> trigger finding is<br />
protected, and <strong>the</strong> Emergency Sharing System is activated in <strong>the</strong> absence <strong>of</strong><br />
o<strong>the</strong>r possible Board actions which also require this high Special Majority.<br />
(d) Second Special Majority<br />
<strong>The</strong> Second Special Majority is <strong>the</strong> most demanding <strong>of</strong> <strong>the</strong> three majorities.<br />
It requires <strong>the</strong> affirmative vote <strong>of</strong> nineteen <strong>IEA</strong> countries, that is, all but<br />
three Members; this is expressed in Article 62.4(b) as “57 general voting<br />
weights . . .”. <strong>The</strong> Second Special Majority is to be applied only to <strong>the</strong><br />
cases specified in this Article: decisions not to activate <strong>the</strong> selective trigger<br />
(Articles 19.3 and 17, a shortfall for one or more individual countries, but<br />
not for <strong>the</strong> group as a whole), decisions to maintain those measures (Article<br />
23.3) and decisions to deactivate those measures (Article 24). Since <strong>the</strong>se<br />
selective trigger questions have never arisen, <strong>the</strong> Governing Board has yet to<br />
have <strong>the</strong> occasion to apply <strong>the</strong> Second Special Majority rule.<br />
<strong>The</strong> voting rule applicable to <strong>the</strong> Governing Board’s decision to block<br />
<strong>the</strong> selective trigger measures or to deactivate <strong>the</strong>m is <strong>the</strong> <strong>IEA</strong>’s most<br />
demanding voting requirement, o<strong>the</strong>r than unanimity. <strong>The</strong> underlying<br />
intention initially was to require all but two Members to join in a decision to<br />
block <strong>the</strong> selective trigger; this trigger required special protection because it<br />
applied when only one or a few countries were affected by an oil supply<br />
shortfall, as was <strong>the</strong> case <strong>of</strong> <strong>the</strong> embargo imposed on a few countries in <strong>the</strong><br />
1973-<strong>1974</strong> crisis. In <strong>the</strong>se situations <strong>the</strong> o<strong>the</strong>r Members might have less<br />
direct economic or political interest in making <strong>the</strong> necessary sacrifices to<br />
195
apply <strong>the</strong> Emergency Sharing System. Of course <strong>the</strong>re had to be <strong>the</strong><br />
possibility <strong>of</strong> an intervening political decision to block <strong>the</strong> system, but only<br />
if this extraordinarily high majority favoured <strong>the</strong> blocking action, initially<br />
all but two, and now all but three <strong>of</strong> <strong>the</strong> Members. As <strong>the</strong> Agency’s<br />
membership grew, it became inherently easier to take blocking action, since<br />
<strong>the</strong>re were more and more Members among which <strong>the</strong> affected country<br />
could find two o<strong>the</strong>rs for <strong>the</strong> necessary support to prevent <strong>the</strong> blocking<br />
action. In consequence, with <strong>the</strong> membership <strong>of</strong> Portugal in 1980 <strong>the</strong><br />
Board decided to move from an “all but two” (expressed as N-2 in <strong>IEA</strong><br />
documentation) to an “all but three” (N-3) affirmative voting requirement<br />
to block <strong>the</strong> selective trigger. Viewed from <strong>the</strong> standpoint <strong>of</strong> an individual<br />
country (or small group <strong>of</strong> countries) suffering an oil embargo or o<strong>the</strong>r oil<br />
supply disruption, that country and any three o<strong>the</strong>r Members could prevent<br />
<strong>the</strong> blocking decision from being taken. In order to give continuing effect<br />
to <strong>the</strong> founders’ intentions, <strong>the</strong> current N-3 concepts would again have to be<br />
reexamined, and possibly increased to N-4 if <strong>the</strong>re should be fur<strong>the</strong>r<br />
substantial increases in <strong>IEA</strong> membership.<br />
This elaborate voting system, designed to protect <strong>the</strong> varied interests <strong>of</strong><br />
<strong>IEA</strong> Member countries in <strong>the</strong> different situations outlined above, has quite<br />
adequately met <strong>the</strong> needs <strong>of</strong> <strong>the</strong> Agency in its formative years. <strong>The</strong> majority<br />
voting rule has in many instances enabled <strong>the</strong> Governing Board to reach<br />
decisions which might not have been possible if unanimity had been<br />
required. Since <strong>the</strong>se decisions are taken “next door” to <strong>the</strong> OECD Council,<br />
where unanimity is <strong>the</strong> general rule, <strong>the</strong> immense operational advantages <strong>of</strong><br />
majority voting have been apparent. While many o<strong>the</strong>r organizations <strong>of</strong>ten<br />
apply majority voting rules, <strong>the</strong>y commonly lack <strong>the</strong> competence to make <strong>the</strong><br />
binding substantive decisions which <strong>the</strong> Agency’s Governing Board is<br />
empowered to make. Still, <strong>the</strong> most significant element <strong>of</strong> <strong>the</strong> <strong>IEA</strong> system in<br />
practice is clearly <strong>the</strong> use <strong>of</strong> consensus (which is preferable to forcing matters<br />
to formal vote) and <strong>the</strong> highly developed sense <strong>of</strong> co-operation among<br />
Members in <strong>the</strong>ir approach to decision making. Against <strong>the</strong> background <strong>of</strong><br />
<strong>the</strong> Agreement’s formal voting rules, <strong>the</strong> Board’s practical approach enables<br />
it to move expeditiously in dealing with sensitive political subjects which<br />
might o<strong>the</strong>rwise prove difficult to manage in a multilateral institution.<br />
(e) Norway and <strong>IEA</strong> Voting<br />
<strong>The</strong> special status <strong>of</strong> Norway warrants attention here because some <strong>of</strong> <strong>the</strong><br />
foregoing voting rules have varied slightly when Norway has participated in<br />
Governing Board decisions. Norway’s special status is reviewed generally in<br />
196
Chapter IV, Section A-3 above. Norway is not a full <strong>IEA</strong> “Participating<br />
Country” in <strong>the</strong> sense <strong>of</strong> <strong>the</strong> I.E.P. membership provisions. Norway cooperates<br />
in <strong>the</strong> <strong>IEA</strong> in much <strong>the</strong> same way as full Members, but this status<br />
derives from <strong>the</strong> Agreement between <strong>the</strong> <strong>IEA</strong> and Norway, concluded on 7<br />
February 1975 [<strong>IEA</strong>/GB(75)9]. That Agreement leaves largely to later<br />
decisions and consultations <strong>the</strong> possible contributions <strong>of</strong> Norway to <strong>the</strong><br />
emergency sharing process [Articles 1 and 2], but provides for Norway to<br />
have <strong>the</strong> rights and obligations <strong>of</strong> Members under Chapter V on <strong>the</strong><br />
Information System on <strong>the</strong> International Oil Market, Chapter VI on <strong>the</strong><br />
Framework for Consultation with Oil Companies, Chapter VII on Long-<br />
Term Co-operation on Energy and Chapter VIII on Relations with Producer<br />
Countries and with o<strong>the</strong>r Consumer Countries.<br />
Article 5 <strong>of</strong> <strong>the</strong> Agreement with Norway provides for appropriate<br />
institutional provisions to be determined in <strong>the</strong> future. Voting questions<br />
obviously arise for Norway under <strong>the</strong> Emergency Sharing System when<br />
Norway participates and for <strong>the</strong> large number <strong>of</strong> decisions taken under<br />
I.E.P. Chapters V to VIII inclusive as well as potentially on <strong>the</strong><br />
institutional decisions taken by <strong>the</strong> Governing Board under Chapter IX.<br />
<strong>The</strong>se have been developed in <strong>the</strong> Governing Board’s “Decision on<br />
Institutional Arrangements for <strong>the</strong> Participation <strong>of</strong> Norway”, adopted in<br />
March 1975 [<strong>IEA</strong>/GB(75)15, Annex IV], referred to as <strong>the</strong> “Norway<br />
Decision”. That Decision refers to three different categories <strong>of</strong> voting<br />
decisions:<br />
(1) Decisions to be taken by majority on <strong>the</strong> scales <strong>of</strong><br />
contributions and all o<strong>the</strong>r majority vote matters arising<br />
under Chapters V through X <strong>of</strong> <strong>the</strong> I.E.P. Agreement;<br />
(2) Decisions to be made under <strong>the</strong> Chapters I to IV inclusive<br />
(emergency sharing provisions), except for decisions taken<br />
in <strong>the</strong> emergencies <strong>the</strong>mselves;<br />
(3) Decisions taken in <strong>the</strong> course <strong>of</strong> emergencies in which<br />
Norway decides to participate.<br />
<strong>The</strong>re is also provision for full participation <strong>of</strong> Norway in special activities<br />
under Articles 64.2 and 65 <strong>of</strong> <strong>the</strong> I.E.P. Agreement which in effect confer<br />
voting rights with respect to those activities [Norway Decision, paragraph 6].<br />
In <strong>the</strong> first case listed above (majority voting), which arises regularly<br />
through Norway’s participation in <strong>the</strong> daily life <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong> Norway<br />
Decision sets out quite clear and directly applicable rules. Thus paragraph<br />
2 <strong>of</strong> <strong>the</strong> Norway Decision (as amended to date) states that:<br />
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<strong>The</strong> Governing Board shall take decisions as to changes in <strong>the</strong><br />
scale <strong>of</strong> contributions to <strong>the</strong> budget under Article 64.1 <strong>of</strong> <strong>the</strong><br />
I.E.P. Agreement, and all o<strong>the</strong>r decisions arising under Chapter V<br />
through X <strong>of</strong> <strong>the</strong> I.E.P. Agreement which require a majority, as if<br />
(a) Norway were deemed to be included in <strong>the</strong> list <strong>of</strong> Participating<br />
Countries set forth in Article 62, paragraph 2, and to have<br />
three general voting weights and three combined voting<br />
weights;<br />
(b) <strong>The</strong> total number <strong>of</strong> general voting weights and combined<br />
voting weights set forth in Article 62, paragraph 2, were<br />
deemed to be 69 and 169 respectively” [Emphasis added].<br />
<strong>The</strong> foregoing provisions <strong>of</strong> <strong>the</strong> Norway Decision brought into operation a<br />
significant change in <strong>the</strong> <strong>IEA</strong> voting system, not in <strong>the</strong> form <strong>of</strong> an<br />
amendment to <strong>the</strong> I.E.P Agreement, but by means <strong>of</strong> a voting arrangement<br />
among <strong>the</strong> Members. Amending <strong>the</strong> Agreement would have been too<br />
burdensome and time consuming a procedure to present a practical solution,<br />
if an alternative could be found. <strong>The</strong> alternative was a voting arrangement<br />
by which <strong>the</strong> Governing Board agreed that in <strong>the</strong> circumstances described in<br />
paragraph 2 <strong>of</strong> <strong>the</strong> Norway Decision, <strong>the</strong> Board would act “as if” Norway<br />
were included in Article 62.2 <strong>of</strong> <strong>the</strong> I.E.P. Agreement. In practice, Norway<br />
has participated like a full Member in Governing Board actions taken in <strong>the</strong><br />
situations described in paragraph 2. <strong>The</strong>re has never arisen a question <strong>of</strong><br />
whe<strong>the</strong>r <strong>the</strong> Norway rule was critical to any particular Board decision to<br />
which paragraph 2 <strong>of</strong> <strong>the</strong> Norway Decision was applicable.<br />
For all decisions o<strong>the</strong>r than those foreseen in paragraph 2, an additional<br />
rule was necessary to preserve <strong>the</strong> right <strong>of</strong> Norway to participate or not in<br />
Governing Board actions requiring unanimity. <strong>The</strong> opportunity afforded<br />
Norway to adhere to those decisions is provided in <strong>the</strong> Norway Decision as follows:<br />
Norway may adhere to any decision <strong>of</strong> <strong>the</strong> Governing Board to<br />
which paragraph 2 does not apply, and shall not be bound by<br />
any such decision to which it does not adhere.<br />
Under that formulation Norway is free to join in a decision requiring<br />
unanimity, but Norway is not empowered to prevent <strong>the</strong> Members from<br />
taking a decision by unanimity.<br />
<strong>The</strong> participation <strong>of</strong> Norway in decisions on <strong>the</strong> Emergency<br />
Allocation System decisions was left “to arrangements which shall be<br />
adopted by <strong>the</strong> Governing Board after considering <strong>the</strong> recommendation <strong>of</strong><br />
198
<strong>the</strong> Standing Group on Emergency Questions and in agreement with<br />
Norway” [Norway Decision, paragraph 4]. This applies to <strong>the</strong><br />
participation <strong>of</strong> Norway under Chapters I through IV <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement “o<strong>the</strong>r than in cases <strong>of</strong> emergency”; that is, paragraph 4 applies<br />
to <strong>the</strong> Board’s many decisions fur<strong>the</strong>r developing and testing (but not<br />
actually applying) <strong>the</strong> Emergency Sharing System. Here <strong>the</strong> practice has<br />
varied somewhat over <strong>the</strong> years. Norway adopted <strong>the</strong> practice <strong>of</strong><br />
announcing its adherence to particular decisions, and <strong>the</strong>re were a number<br />
<strong>of</strong> footnotes in <strong>the</strong> Board’s Conclusions to that effect. This turned out to be<br />
a heavy procedure not particularly favoured by Norway and awkward both<br />
for Norway and <strong>the</strong> Agency. <strong>The</strong> practice <strong>the</strong>n developed for <strong>the</strong><br />
Secretariat to assume that Norway was adhering to those Emergency<br />
Sharing System decisions in <strong>the</strong> absence <strong>of</strong> a stated objection by Norway,<br />
but that procedure has not been formalized by <strong>the</strong> SEQ recommendations<br />
and Board decisions foreseen in paragraph 4.<br />
In an actual emergency, <strong>the</strong> modalities <strong>of</strong> participation <strong>of</strong> Norway are<br />
left to much <strong>the</strong> same procedure that is described above for decisions on <strong>the</strong><br />
development <strong>of</strong> <strong>the</strong> System, but <strong>the</strong> Governing Board is to take into account<br />
<strong>the</strong> specific nature and extent <strong>of</strong> Norwegian contribution, as provided in<br />
paragraph 5 <strong>of</strong> <strong>the</strong> Norway Decision:<br />
In cases <strong>of</strong> emergency in which Norway decides to contribute to<br />
<strong>the</strong> Agency’s oil sharing programme pursuant to Article 1 <strong>of</strong><br />
<strong>the</strong> Participation Agreement, <strong>the</strong> participation <strong>of</strong> Norway in <strong>the</strong><br />
work <strong>of</strong> <strong>the</strong> Agency under Chapters I through IV shall be<br />
implemented pursuant to fur<strong>the</strong>r arrangements which shall<br />
be adopted by <strong>the</strong> Governing Board, in <strong>the</strong> light <strong>of</strong> <strong>the</strong> nature<br />
and extent <strong>of</strong> Norway’s contribution, after considering <strong>the</strong><br />
recommendations <strong>of</strong> <strong>the</strong> Standing Group on Emergency<br />
Questions and in agreement with Norway [Emphasis added].<br />
In <strong>the</strong> procedures that <strong>the</strong> Secretariat expects to follow in an I.E.P. emergency<br />
leading up to <strong>the</strong> activation <strong>of</strong> <strong>the</strong> Emergency Sharing System, <strong>the</strong>re is<br />
provision for early consultation with Norway on <strong>the</strong> questions <strong>of</strong> <strong>the</strong> nature<br />
and extent <strong>of</strong> <strong>the</strong> Norwegian contribution and <strong>the</strong> modalities <strong>of</strong> its<br />
participation. Up to <strong>the</strong> time <strong>of</strong> this writing, it has not been necessary to enter<br />
into such consultations and <strong>the</strong> question <strong>of</strong> modalities has thus not arisen.<br />
Norway did <strong>of</strong> course participate fully in <strong>the</strong> Governing Board’s decisions on<br />
<strong>the</strong> 1990-1991 Gulf Crisis, but those decisions were taken under <strong>the</strong> Board’s<br />
general powers and not under Chapters I through IV <strong>of</strong> <strong>the</strong> I.E.P. Agreement,<br />
199
so <strong>the</strong> question <strong>of</strong> arrangements for participation in <strong>the</strong> Emergency Sharing<br />
System never arose. <strong>The</strong> Board made no specific reference to <strong>the</strong> voting<br />
arrangements in its Conclusions on <strong>the</strong> Gulf Crisis decisions.<br />
14. Abstentions<br />
Abstentions are explicitly recognized in <strong>the</strong> I.E.P. Agreement, and <strong>the</strong>y are<br />
employed as a normal procedure in most deliberative bodies. <strong>The</strong> function<br />
<strong>of</strong> abstention under <strong>the</strong> I.E.P. Agreement is to permit a Member to avoid<br />
direct participation in a decision, yet be bound by it, a process which can<br />
carry substantial political advantage and facilitate decision making. <strong>The</strong><br />
institutional situation <strong>of</strong> abstention varies somewhat between <strong>the</strong> various<br />
<strong>IEA</strong> voting rules, although <strong>the</strong> outcome for each is similar.<br />
Abstention in cases requiring unanimity is specifically foreseen in<br />
Article 62.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement in <strong>the</strong> following terms:<br />
Unanimity shall require all <strong>the</strong> votes <strong>of</strong> <strong>the</strong> Participating<br />
Countries present and voting. Countries abstaining shall be<br />
considered as not voting [Emphasis added].<br />
Textually this means that absent or abstaining Members cannot prevent a unanimous<br />
decision being taken by <strong>the</strong> rest <strong>of</strong> <strong>the</strong> Members. Hence <strong>the</strong>re is no veto effect. To<br />
carry out a veto, <strong>the</strong> Member would have to appear and cast a negative vote. <strong>The</strong><br />
implication is that <strong>the</strong> abstaining Member is never<strong>the</strong>less bound by <strong>the</strong> decision<br />
in accordance with its terms. In order for <strong>the</strong> decision not to be binding on <strong>the</strong><br />
absent or abstaining Members, <strong>the</strong> decision would have to contain language to that<br />
effect. <strong>The</strong>re is in fact specific authorization for that “contracting out” procedure<br />
in Article 61.2 which states that decisions requiring unanimity may provide:<br />
(a) that <strong>the</strong>y shall not be binding on one or more Participating<br />
Countries.<br />
In o<strong>the</strong>r words, unless <strong>the</strong> decision adopted by <strong>the</strong> o<strong>the</strong>r Members<br />
specifically provides for <strong>the</strong> decision not to be binding on <strong>the</strong> absent or<br />
abstaining Members, <strong>the</strong> decision is binding on <strong>the</strong>m in <strong>the</strong> same way that it<br />
is binding on <strong>the</strong> o<strong>the</strong>rs. This reflects <strong>the</strong> intention <strong>of</strong> <strong>the</strong> founders to avoid<br />
selective participation <strong>of</strong> Members in difficult decisions to be taken by <strong>the</strong><br />
Board. Members were not to have à la carte service in <strong>the</strong> absence <strong>of</strong> <strong>the</strong><br />
agreement <strong>of</strong> <strong>the</strong> o<strong>the</strong>r Members. In practice this type <strong>of</strong> “contracting out”<br />
has been used sparingly and reluctantly, and only in unavoidable cases like<br />
<strong>20</strong>0
<strong>the</strong> non-application <strong>of</strong> Chapter V <strong>of</strong> <strong>the</strong> Long-Term Co-operation Programme<br />
to Canada [See <strong>IEA</strong>/GB(76)5, Item 2(m)] and Australia [See <strong>IEA</strong>/<br />
GB(79)8, Item 2(b)] under special circumstances.<br />
For <strong>the</strong> I.E.P. majority situations, abstention is indirectly foreseen in<br />
<strong>the</strong> reference in Article 62.3, <strong>the</strong> majority voting provision, to “60 per cent<br />
<strong>of</strong> <strong>the</strong> total combined voting weights and 50 per cent <strong>of</strong> <strong>the</strong> general voting<br />
weights cast”, which implies that some <strong>of</strong> those voting weights may not be<br />
cast and that such abstentions would not prevent <strong>the</strong> majority from<br />
o<strong>the</strong>rwise being achieved. Obviously for <strong>the</strong> minority and any absent or<br />
abstaining Members, <strong>the</strong> decision voted by <strong>the</strong> majority is binding. <strong>The</strong>re is<br />
no specific provision for a “contracting out” in majority vote cases, unlike<br />
<strong>the</strong> provision for unanimity quoted above, but that might never<strong>the</strong>less be<br />
realized by specific provision in <strong>the</strong> text <strong>of</strong> <strong>the</strong> decision itself.<br />
For <strong>the</strong> two Special Majorities, <strong>the</strong>re is no provision for abstention<br />
and no reference to any percentage <strong>of</strong> Members “voting” or <strong>of</strong> “voting<br />
weights cast” in <strong>the</strong> governing texts. <strong>The</strong> required votes for adoption in<br />
each <strong>of</strong> those cases are absolute and not relative to votes cast. Hence once<br />
<strong>the</strong> required votes are cast for <strong>the</strong> Special Majority, <strong>the</strong> measure is adopted<br />
notwithstanding whatever negative votes might be cast or whatever number<br />
<strong>of</strong> Members might be absent or abstain. Here again <strong>the</strong> decision is fully<br />
binding on those countries despite <strong>the</strong>ir opposition or non-participation.<br />
15. Written Procedure<br />
<strong>The</strong>re have inevitably arisen in <strong>the</strong> <strong>IEA</strong>, as in o<strong>the</strong>r organizations, occasions<br />
where a question requires prompt decision during <strong>the</strong> intervals between<br />
meetings, and yet <strong>the</strong> question does not warrant advancing <strong>the</strong> next meeting<br />
or calling a special meeting <strong>of</strong> <strong>the</strong> responsible body. For <strong>the</strong> <strong>IEA</strong> it soon<br />
became apparent that a solution to this problem would be necessary to<br />
avoid <strong>the</strong> alternative <strong>of</strong> accepting at times undue delay in Governing Board<br />
actions or <strong>the</strong> expense <strong>of</strong> a special meeting.<br />
In a few cases <strong>the</strong> Governing Board foresaw that this type <strong>of</strong> problem<br />
would arise in relation to an Agenda Item on which <strong>the</strong> Board was close to<br />
agreement or to which Members could agree only ad referendum. In those<br />
cases, when early confirmation was expected, <strong>the</strong> Board simply decided that<br />
in <strong>the</strong> absence <strong>of</strong> objection within a specified period, <strong>the</strong> proposal would be<br />
taken as adopted. One early and important use <strong>of</strong> this procedure was <strong>the</strong><br />
adoption <strong>of</strong> <strong>the</strong> Long-Term Co-operation Programme in <strong>the</strong> Governing<br />
Board’s Conclusions <strong>of</strong> 29-30 January 1976 [<strong>IEA</strong>/GB(76)5, Item 2] where<br />
<strong>the</strong> Board:<br />
<strong>20</strong>1
(a) reached agreement on <strong>the</strong> Long Term Co-operation Programme<br />
(<strong>the</strong> “Programme”) [<strong>IEA</strong>/GB(75)81(3rd Revision)],<br />
to which no Delegations raised objections, and on <strong>the</strong> texts, as<br />
prepared in <strong>the</strong> Governing Board, <strong>of</strong> <strong>the</strong> Conclusions relating<br />
<strong>the</strong>reto.<br />
(b) noted in respect <strong>of</strong> <strong>the</strong> Programme <strong>the</strong> “réserve d’attente” <strong>of</strong><br />
Japan and Spain, <strong>the</strong> agreement ad referendum <strong>of</strong> <strong>the</strong><br />
United Kingdom, and <strong>the</strong> need for fur<strong>the</strong>r discussions with<br />
New Zealand before its decision on <strong>the</strong> Programme will be<br />
transmitted to <strong>the</strong> Board.<br />
(c) decided that this agreement will be deemed to be a formal<br />
decision <strong>of</strong> <strong>the</strong> Governing Board when those countries<br />
referred to in paragraph (b) above, which indicated that<br />
<strong>the</strong>y would give <strong>the</strong>ir formal consent <strong>the</strong>reto in a short<br />
period <strong>of</strong> time, have done so . . .<br />
<strong>The</strong>reafter <strong>the</strong> condition stated in paragraph (c) was satisfied by <strong>the</strong><br />
transmittal <strong>of</strong> <strong>the</strong> necessary formal consents <strong>of</strong> <strong>the</strong> three countries<br />
mentioned. That was done by 8 March 1976 which became <strong>the</strong> effective<br />
date <strong>of</strong> <strong>the</strong> Programme.<br />
On <strong>the</strong> second occasion on which this type <strong>of</strong> procedure was adopted<br />
[See <strong>IEA</strong>/GB(76)13, Item 2], <strong>the</strong> Board left open <strong>the</strong> drafting <strong>of</strong> a new<br />
version <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Security Principles and Procedures at <strong>the</strong> close <strong>of</strong> its<br />
discussion and “requested <strong>the</strong> Secretariat to prepare, on <strong>the</strong> basis <strong>of</strong> <strong>the</strong><br />
discussions in <strong>the</strong> Board, a new version <strong>of</strong> that document for distribution to<br />
Delegations”. <strong>The</strong> Governing Board <strong>the</strong>n<br />
(b) decided that in <strong>the</strong> absence <strong>of</strong> objection from Delegations<br />
to <strong>the</strong> new version <strong>of</strong> <strong>the</strong> document within 15 days after<br />
<strong>the</strong> document is distributed to Delegations, <strong>the</strong> new version<br />
shall be deemed to be adopted by <strong>the</strong> Governing Board.<br />
Subsequently, <strong>the</strong> Board explicitly noted that <strong>the</strong> revised document “was<br />
adopted by <strong>the</strong> Governing Board as <strong>of</strong> 12th April, 1976” [<strong>IEA</strong>/GB(76)24,<br />
Item 7]. In recent years <strong>the</strong> Board has not found <strong>the</strong> need to employ that<br />
type <strong>of</strong> procedure, but might be expected to do so again if <strong>the</strong> occasion<br />
should arise.<br />
However, <strong>the</strong> Board has employed on many occasions <strong>the</strong> more formal<br />
“written procedure” which involves <strong>the</strong> submission to Members’<br />
representatives to <strong>the</strong> Governing Board, by mail or o<strong>the</strong>r current means <strong>of</strong><br />
<strong>20</strong>2
communication, <strong>of</strong> <strong>the</strong> specific proposals for adoption by <strong>the</strong> Board. It was<br />
proposed that <strong>the</strong> action be taken, not in <strong>the</strong> Board’s following meeting, but<br />
in <strong>the</strong> interim by means <strong>of</strong> passive acquiescence within a specified period, in<br />
practice 21 days after dispatch <strong>of</strong> <strong>the</strong> communication. At <strong>the</strong> close <strong>of</strong> <strong>the</strong><br />
21 day period (and sometimes after <strong>the</strong> passage <strong>of</strong> a few extra days <strong>of</strong><br />
grace), <strong>the</strong> Secretariat acts on <strong>the</strong> decision and later presents <strong>the</strong> decision to<br />
<strong>the</strong> next meeting <strong>of</strong> <strong>the</strong> Board for recording (as <strong>the</strong> decision is already<br />
<strong>of</strong>ficially taken) in <strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong> Board. <strong>The</strong> written procedure has<br />
been applied numerous times on various subjects, including <strong>the</strong> acceptance<br />
<strong>of</strong> voluntary contributions and grants, <strong>the</strong> election <strong>of</strong> members to <strong>the</strong> Coal<br />
Industry Advisory Board (CIAB), <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> scales <strong>of</strong> contributions<br />
<strong>of</strong> Members and <strong>the</strong> authorization <strong>of</strong> Associate participation in energy R &<br />
D Implementing Agreements <strong>of</strong> applicants for that participation. This<br />
procedure, initiated sometimes at <strong>the</strong> request <strong>of</strong> <strong>the</strong> Governing Board,<br />
sometimes upon <strong>the</strong> initiative <strong>of</strong> <strong>the</strong> Secretariat, may be taken as established<br />
<strong>IEA</strong> practice.<br />
<strong>The</strong> initiative for <strong>the</strong> formal written procedure came first from <strong>the</strong><br />
Governing Board in 1980 during discussion <strong>of</strong> a voluntary contribution by a<br />
Member country, <strong>the</strong> acceptance <strong>of</strong> which requires Governing Board<br />
approval [See Council Decision, Article 10(c)]. <strong>The</strong> Board <strong>the</strong>n requested<br />
<strong>the</strong> Secretariat to submit a proposal for a more flexible procedure for<br />
handling Members’ proposals for making grants [<strong>IEA</strong>/GB(80)69, Item 9]<br />
which led <strong>the</strong> Board to decide, with respect to voluntary contributions or<br />
grants to be included in <strong>the</strong> Agency’s Programme <strong>of</strong> Work and up to an<br />
amount not exceeding FF 250,000, that:<br />
(a) <strong>the</strong> Executive Director shall circulate to all Participating<br />
Countries information on <strong>the</strong> source, destination and<br />
amount <strong>of</strong> any <strong>of</strong>fer <strong>of</strong> a voluntary contribution or grant<br />
toge<strong>the</strong>r with his proposal to accept or refuse such <strong>of</strong>fer;<br />
(b) <strong>the</strong> proposal made by <strong>the</strong> Executive Director shall be<br />
regarded as accepted by <strong>the</strong> Governing Board, and such<br />
acceptance shall be recorded in <strong>the</strong> Conclusions <strong>of</strong> a<br />
subsequent Meeting <strong>of</strong> <strong>the</strong> Board, unless a Participating<br />
Country expresses reservations about <strong>the</strong> proposal to <strong>the</strong><br />
Executive Director within 21 days following circulation <strong>of</strong><br />
<strong>the</strong> proposal [See <strong>IEA</strong>/GB(80)86, Item 5].<br />
At <strong>the</strong> time <strong>of</strong> this writing, <strong>the</strong> written procedure has been employed<br />
on twenty occasions for <strong>the</strong> acceptance <strong>of</strong> voluntary contributions and<br />
<strong>20</strong>3
grants. By 1991 <strong>the</strong> FF 250,000 amount had been overtaken by inflation,<br />
so <strong>the</strong> Board increased <strong>the</strong> ceiling to FF 500,000 where it remains at <strong>the</strong><br />
present time. In December 1993 <strong>the</strong> Governing Board adopted a parallel<br />
procedure for <strong>the</strong> acceptance <strong>of</strong> voluntary contributions and grants, without<br />
reference to <strong>the</strong> amount, for <strong>the</strong> joint <strong>IEA</strong>/OECD study on energy and<br />
environmental technologies to respond to global environmental concerns<br />
[<strong>IEA</strong>/GB(93)65, Item 6(a)(ii)].<br />
<strong>The</strong> written procedure has also been employed many times for <strong>the</strong> election<br />
<strong>of</strong> members <strong>of</strong> <strong>the</strong> Coal Industry Advisory Board (CIAB), first pursuant<br />
to a Board request in 1982 [<strong>IEA</strong>/GB(82)92, Annex III, paragraph 2], and<br />
<strong>the</strong>reafter in 1985, when <strong>the</strong> Board decided:<br />
To request <strong>the</strong> Executive Director to circulate to all Delegations,<br />
as <strong>the</strong> need may arise from time to time, a document containing,<br />
toge<strong>the</strong>r with <strong>the</strong> Executive Director’s recommendations, <strong>the</strong><br />
names <strong>of</strong> additional individuals proposed by a Government or by<br />
<strong>the</strong> Executive Director for membership <strong>of</strong> <strong>the</strong> Coal Industry<br />
Advisory Board. Such individuals shall be considered as<br />
appointed by <strong>the</strong> Governing Board if, within 21 days, no<br />
Delegation requests that this item be placed on <strong>the</strong> Agenda <strong>of</strong> <strong>the</strong><br />
Governing Board. CIAB members approved under this procedure<br />
shall be recorded in <strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong> next Meeting <strong>of</strong> <strong>the</strong><br />
Governing Board [<strong>IEA</strong>/GB(85)53, Annex IV, paragraph 3].<br />
<strong>The</strong> Secretariat has utilized <strong>the</strong> CIAB procedure when it would not be<br />
convenient to await <strong>the</strong> next meeting <strong>of</strong> <strong>the</strong> Board for <strong>the</strong> election to take<br />
place. In effect this provides a workable solution to <strong>the</strong> problem <strong>of</strong><br />
proceeding with <strong>the</strong> election <strong>of</strong> candidates proposed after one Board<br />
meeting when <strong>the</strong> CIAB would meet before <strong>the</strong> next Governing Board<br />
meeting.<br />
Scales <strong>of</strong> contributions is ano<strong>the</strong>r subject on which <strong>the</strong> Board and <strong>the</strong><br />
Secretariat have <strong>of</strong>ten found <strong>the</strong> written procedure to provide a convenient<br />
solution to an awkward problem. <strong>The</strong> scale <strong>of</strong> contributions has always been<br />
a non-controversial matter for which <strong>the</strong> proposals were developed by <strong>the</strong><br />
OECD statistical staff who prepared <strong>the</strong> scales for all <strong>of</strong> <strong>the</strong> OECD. <strong>The</strong><br />
problem <strong>of</strong> timing <strong>of</strong> <strong>the</strong> decision arose when <strong>the</strong> OECD scales were ready for<br />
adoption and <strong>the</strong> staff was ready to call in <strong>the</strong> contributions for <strong>the</strong> OECD<br />
before <strong>the</strong> next <strong>IEA</strong> Governing Board meeting which would normally adopt<br />
<strong>the</strong> <strong>IEA</strong> scale. <strong>The</strong> written procedure has been used in <strong>the</strong>se circumstance in<br />
order to enable <strong>the</strong> OECD to call up all <strong>the</strong> contributions toge<strong>the</strong>r.<br />
<strong>20</strong>4
When this problem was foreseen in December 1985, <strong>the</strong> Board<br />
“agreed that <strong>the</strong> Governing Board would fix <strong>the</strong> Scale <strong>of</strong> Contributions to<br />
<strong>the</strong> 1986 Budget <strong>of</strong> <strong>the</strong> Agency by <strong>the</strong> written procedure”, without defining<br />
<strong>the</strong> precise procedure to be followed [<strong>IEA</strong>/GB(85)56, Item 3]. Following<br />
<strong>the</strong> adoption <strong>of</strong> <strong>the</strong> decision by <strong>the</strong> absence <strong>of</strong> response to <strong>the</strong> Executive<br />
Director’s circulated proposal, and after <strong>the</strong> contributions were being called<br />
up pursuant to that decision, <strong>the</strong> Board “recorded its agreement on <strong>the</strong><br />
Scale <strong>of</strong> Contributions to <strong>the</strong> 1986 Budget <strong>of</strong> <strong>the</strong> Agency set forth in <strong>the</strong><br />
Annex to document <strong>IEA</strong>/GB(86)13” [See <strong>IEA</strong>/GB(86)15, Item 4(d)].<br />
<strong>The</strong>reafter, <strong>the</strong> Secretariat sometimes took <strong>the</strong> initiative to employ <strong>the</strong><br />
written procedure in parallel circumstances, and <strong>the</strong> Board subsequently in<br />
all cases recorded <strong>the</strong> outcome for <strong>the</strong> scales applicable in 1987<br />
[<strong>IEA</strong>/GB(87)29, Item 5(c)], 1988 [<strong>IEA</strong>/GB(88)14, Item 4(b)], 1989<br />
[<strong>IEA</strong>/GB(89)11, Item 5(c)] and 1990 [<strong>IEA</strong>/GB(90)10, Item 4(b)].<br />
In 1991 <strong>the</strong> Governing Board established a system <strong>of</strong> Associate<br />
participation in <strong>the</strong> <strong>IEA</strong>’s energy R & D Implementing Agreements for Non-<br />
Members <strong>of</strong> <strong>the</strong> OECD and for international organizations in which those<br />
countries participate. <strong>The</strong> authorization for each case is subject to <strong>the</strong><br />
agreement <strong>of</strong> <strong>the</strong> Governing Board. <strong>The</strong> Board also decided that its final<br />
decisions to authorize such participation would be taken by <strong>the</strong> written<br />
procedure [<strong>IEA</strong>/GB(91)79, Item 5(f)(c)]. That procedure has been applied<br />
for Israel and Malaysia [<strong>IEA</strong>/GB(92)17, Item 4(c)], Israel [<strong>IEA</strong>/GB(92)45,<br />
Item 7(e), Poland [<strong>IEA</strong>/GB(93)11, Item 7(b)], and for Korea and Russia<br />
[<strong>IEA</strong>/GB(93)57, Item 9(c)].<br />
<strong>The</strong> written procedure has thus proven itself in practice to be a helpful<br />
tool in providing decisions on short notice when necessary between meetings. It<br />
has been used principally on non-controversial, formal type questions on which<br />
<strong>the</strong> Board would be expected to act favourably (and usually without discussion)<br />
if presented to a regular meeting. <strong>The</strong> Secretariat has avoided <strong>the</strong> use <strong>of</strong> this<br />
procedure when <strong>the</strong>re might be a risk <strong>of</strong> disagreement on <strong>the</strong> substance or a<br />
question about <strong>the</strong> appropriateness <strong>of</strong> <strong>the</strong> use <strong>of</strong> <strong>the</strong> procedure itself, for a single<br />
negative response for whatever reason by any Delegation would interrupt <strong>the</strong><br />
procedure. Under <strong>the</strong>se circumstances it is not surprising that <strong>the</strong>re has never to<br />
date been a negative response or failure in <strong>the</strong> use <strong>of</strong> <strong>the</strong> written procedure.<br />
16. Effect <strong>of</strong> Actions: Decisions, Recommendations,<br />
Declarations, Conclusions and O<strong>the</strong>rs<br />
<strong>The</strong> principal aid in understanding <strong>the</strong> effects <strong>of</strong> Governing Board meeting<br />
outcomes, whatever <strong>the</strong>y might be called, is <strong>the</strong> I.E.P. Agreement itself,<br />
<strong>20</strong>5
which refers to “decisions”, “recommendations” and “actions”, in some cases<br />
without guidance as to <strong>the</strong> precise meaning <strong>of</strong> those terms as employed.<br />
Article 51.1 states in sparing terms that:<br />
<strong>The</strong> Governing Board shall adopt decisions and make recommendations<br />
which are necessary for <strong>the</strong> proper functioning <strong>of</strong><br />
<strong>the</strong> Program [Emphasis added].<br />
And Article 51.2 provides that:<br />
<strong>The</strong> Governing Board shall review periodically and take<br />
appropriate action concerning developments in <strong>the</strong> international<br />
energy situation . . . [Emphasis added].<br />
In Article 52 <strong>the</strong>re is some help on <strong>the</strong> question <strong>of</strong> binding effect. It states that<br />
“decisions adopted pursuant to this Agreement by <strong>the</strong> Governing Board or by<br />
any o<strong>the</strong>r organ by delegation from <strong>the</strong> Board shall be binding on <strong>the</strong><br />
Participating Countries” [Emphasis added], but nothing is said about <strong>the</strong>ir being<br />
binding on <strong>the</strong> Secretariat (which <strong>of</strong> course <strong>the</strong>y are), nor does <strong>the</strong> text define <strong>the</strong><br />
term “decision”. If decisions are binding, <strong>the</strong> text also states in Article 52.2 that<br />
“Recommendations shall not be binding”. Nothing is said about <strong>the</strong> nature or<br />
effect <strong>of</strong> <strong>the</strong> “actions” which <strong>the</strong> Board is empowered to take pursuant to Article<br />
51.2 quoted in part above. Nor does <strong>the</strong> Agreement state whe<strong>the</strong>r <strong>the</strong> notion <strong>of</strong><br />
“binding” means “politically binding” or “legally binding” although many<br />
decisions are doubtless binding in both senses and some may not be legally<br />
binding at all. Recommendations are not legally binding, at least not in <strong>the</strong> same<br />
sense as decisions are, but are doubtless binding in <strong>the</strong> political sense. <strong>The</strong>re is<br />
thus little guidance in <strong>the</strong> Agreement on how to look at <strong>the</strong> context in which a<br />
measure is acted upon by <strong>the</strong> Board. Often <strong>the</strong>re is silence about <strong>the</strong> “intent” <strong>of</strong><br />
<strong>the</strong> Members acting in <strong>the</strong> Board and <strong>the</strong> effect that <strong>the</strong> choice <strong>of</strong> particular<br />
words is intended to produce, irrespective <strong>of</strong> whe<strong>the</strong>r a measure is called <strong>of</strong>ficially<br />
a decision or a recommendation. Hence <strong>the</strong> proper application <strong>of</strong> <strong>the</strong> rules<br />
quoted above requires careful analysis and judgment.<br />
(a) Political Commitments<br />
Most <strong>of</strong> <strong>the</strong> commitments taken by <strong>IEA</strong> Members in <strong>the</strong> Governing Board,<br />
aside from internal financial, administrative, housekeeping and procedural<br />
<strong>20</strong>6
matters, fall into <strong>the</strong> category <strong>of</strong> “political commitments” taken without <strong>the</strong><br />
Members’ intention to bind <strong>the</strong>mselves legally under <strong>the</strong> rules. <strong>The</strong>se<br />
include virtually all <strong>of</strong> <strong>the</strong> Ministerial Communiqués, much <strong>of</strong> <strong>the</strong> Long-<br />
Term Co-operation Programme, <strong>the</strong> Principles <strong>of</strong> Energy Policy, <strong>the</strong> <strong>IEA</strong><br />
Action on Coal and <strong>the</strong> <strong>IEA</strong> Shared Goals, as examples. Legally binding<br />
measures include part <strong>of</strong> <strong>the</strong> Long-Term Co-operation Programme, many <strong>of</strong><br />
<strong>the</strong> decisions taken for <strong>the</strong> Emergency Sharing System and internal<br />
financial, administrative, housekeeping and procedural decisions. A closer<br />
look at <strong>the</strong> conceptual background will indicate how difficult it is at times<br />
to apply <strong>the</strong> distinction between legal and political commitments.<br />
<strong>The</strong> formal distinction between <strong>the</strong>se two important types <strong>of</strong><br />
commitments may, for <strong>the</strong> purpose <strong>of</strong> aiding <strong>the</strong> analysis <strong>of</strong> choices in <strong>the</strong><br />
<strong>IEA</strong>, be considered in terms <strong>of</strong> three elements:<br />
■<br />
■<br />
■<br />
<strong>the</strong> nature <strong>of</strong> <strong>the</strong> commitment as an expression <strong>of</strong> <strong>the</strong> relations being<br />
entered into;<br />
<strong>the</strong> form in which <strong>the</strong> commitment is taken; and<br />
<strong>the</strong> consequences (or more formally, <strong>the</strong> sanctions) <strong>of</strong> <strong>the</strong><br />
commitment.<br />
A political commitment may be characterized as a statement <strong>of</strong> intention or<br />
expectation that, without assuming a legal obligation, one or more Members<br />
will pursue defined policy lines regarding a given subject matter. <strong>The</strong><br />
element <strong>of</strong> commitment is achieved by communication <strong>of</strong> <strong>the</strong> policy<br />
statement among <strong>the</strong> governments sharing <strong>the</strong> commitment or its<br />
announcement to o<strong>the</strong>r Members or to <strong>the</strong> public. A political commitment<br />
creates what is sometimes characterized as a “moral obligation” (as<br />
distinguished from a more formal legal obligation) <strong>of</strong> <strong>the</strong> participating<br />
governments to carry out <strong>the</strong> stated policy lines in good faith. However, <strong>the</strong><br />
participating governments retain <strong>the</strong> legal power to adopt o<strong>the</strong>r — and<br />
inconsistent — policy lines, and <strong>the</strong>y are always free for that purpose to<br />
invoke <strong>the</strong> provisions <strong>of</strong> <strong>the</strong>ir respective national law.<br />
<strong>The</strong> nature <strong>of</strong> an international commitment is normally determined<br />
by <strong>the</strong> form in which it is taken. A political commitment may be taken by<br />
any means which communicates <strong>the</strong> policy statement in a less than legally<br />
binding form, and this is usually done by <strong>the</strong> adoption <strong>of</strong> declarations or <strong>the</strong><br />
issuance <strong>of</strong> communiqués, diplomatic exchanges, press statements and o<strong>the</strong>r<br />
forms <strong>of</strong> announcement. In international organizations, political<br />
commitments are <strong>of</strong>ten taken by declarations or by decisions which<br />
implicitly or explicitly indicate that <strong>the</strong> action is intended to be political<br />
<strong>20</strong>7
a<strong>the</strong>r than legal in nature or by <strong>the</strong> adoption <strong>of</strong> measures clearly<br />
characterized as recommendations by <strong>the</strong> organization’s governing body.<br />
As a procedural matter <strong>the</strong>re is normally no need for parliamentary<br />
consultation or any treaty “consent to be bound” procedure for <strong>the</strong> adoption<br />
<strong>of</strong> a political commitment.<br />
While international law does not provide formal sanctions for political<br />
commitments as defined above, informal sanctions may have a considerable<br />
impact. A principal informal sanction is <strong>the</strong> inherent and reciprocal benefit<br />
<strong>of</strong> <strong>the</strong> announced policy lines. Governments which have accepted political<br />
commitments must also be responsive to <strong>the</strong> need to retain <strong>the</strong> respect <strong>of</strong><br />
o<strong>the</strong>r governments and public opinion as well as to retain credibility for <strong>the</strong><br />
system, which may be strongly influenced by <strong>the</strong> good faith implementation<br />
<strong>of</strong> <strong>the</strong> commitment while it remains viable. Moreover, if an institutional<br />
policy review procedure is applicable, as in <strong>the</strong> <strong>IEA</strong> country reviews, <strong>the</strong><br />
process <strong>of</strong> review and announcement or publication <strong>of</strong> <strong>the</strong> results may also<br />
act as an effective but informal sanction to <strong>the</strong> commitment.<br />
In <strong>the</strong> <strong>IEA</strong> a number <strong>of</strong> different formulations have been employed to<br />
adopt political commitments. Unless a clear intent to take a legal obligation<br />
was indicated, <strong>the</strong> assumption was normally but not always that a political<br />
commitment is intended. Consequently, a measure called a<br />
“recommendation” or a formulation (whatever it might be called) whereby<br />
<strong>the</strong> Board “recommends”, “urges”, “wishes”, “expects”, “aims to”,<br />
“considers that Members might” or employs o<strong>the</strong>r words to <strong>the</strong> like effect<br />
would state a political commitment, as would a formulation tending to state<br />
a fact, like “it is important to” or tending to make a hortatory statement<br />
like “Members should” or “Members ought to” or “it will be desirable for<br />
Members to” and similar formulations. Thus it will be seen that one key<br />
might be <strong>the</strong> title <strong>of</strong> <strong>the</strong> measure, but ano<strong>the</strong>r might be <strong>the</strong> verb that is<br />
employed in <strong>the</strong> formulation. <strong>The</strong> formulation “recommends that Members<br />
should” is readily distinguishable from “agrees that Members shall”, <strong>the</strong><br />
former normally indicating a political commitment and <strong>the</strong> latter a legal<br />
commitment. <strong>The</strong> political context and <strong>the</strong> degree <strong>of</strong> abstraction <strong>of</strong> <strong>the</strong><br />
formulation are also helpful elements. Highly abstract and broad general<br />
statements are normally indicative <strong>of</strong> a political ra<strong>the</strong>r than a legal<br />
intention, as is <strong>the</strong> use <strong>of</strong> emotive language [“Ministers expressed<br />
abhorrence at <strong>the</strong> continuing ecological effects . . .”; see <strong>IEA</strong>/GB(91)46,<br />
Annex, Communiqué, paragraph 8].<br />
In <strong>the</strong> 1991 <strong>IEA</strong> Ministerial Communiqué <strong>the</strong>re were a number <strong>of</strong><br />
examples <strong>of</strong> formulations which demonstrate <strong>the</strong> range <strong>of</strong> possibilities for<br />
making political commitments. In addition to <strong>the</strong> formulation at <strong>the</strong> end <strong>of</strong><br />
<strong>20</strong>8
<strong>the</strong> preceding paragraph, examples included <strong>the</strong> following: “Ministers<br />
attached particular importance to”, “Ministers concluded that”, “Ministers<br />
recognized that”, “Ministers stressed that”, “Ministers welcomed”,<br />
“Ministers reconfirmed <strong>the</strong>ir commitment that”, “Ministers agreed that<br />
contacts should be”, “Ministers recommended that Member countries”,<br />
“Ministers urged all <strong>IEA</strong> countries to”, “Ministers encouraged Member<br />
countries”, “Ministers, <strong>the</strong>refore, underscored”, “<strong>The</strong>y pointed out that”,<br />
“Ministers recognized that . . . will be required in many Member countries”,<br />
“Ministers invited Member countries”, “Ministers agreed that . . . will be<br />
required”, “<strong>The</strong>y <strong>the</strong>refore urged greater use <strong>of</strong>”, “Ministers agreed that it<br />
was essential to”, “<strong>The</strong>y agreed <strong>the</strong> <strong>IEA</strong> should”, and “Ministers undertook<br />
to continue to co-operate”. In none <strong>of</strong> those cases was <strong>the</strong>re any indication<br />
<strong>of</strong> intent to be legally bound. Not only <strong>the</strong> language employed but also <strong>the</strong><br />
context clearly indicated that only political commitments were intended.<br />
Similar formulations with like effect are found in <strong>the</strong> 1993 Ministerial<br />
Communiqué [<strong>IEA</strong>/GB(93)43, Item 3 and Annex].<br />
A problem <strong>of</strong>ten arose when <strong>the</strong> Governing Board wished to state a<br />
commitment in apparently legally binding terms for added rhetorical effect,<br />
but in fact did not intend to make a legal commitment. This occurred at<br />
times with <strong>the</strong> use <strong>of</strong> <strong>the</strong> words like “decides”, “agrees” or “undertakes” or<br />
“Members shall”. Sometimes an explicit denial <strong>of</strong> legally binding effect<br />
resolved <strong>the</strong> question, in cases such as <strong>the</strong> following:<br />
<strong>The</strong> October 1977 Ministerial Decision on “Group Objectives<br />
and Principles for Energy Policy” was adopted as a “decision”<br />
with formulations like <strong>the</strong> Governing Board “agreed” and “<strong>IEA</strong><br />
countries will” which would denote legal obligations. However,<br />
<strong>the</strong> Governing Board’s Conclusions clarified <strong>the</strong> legal situation<br />
in a paragraph in which <strong>the</strong> Board “agreed that although <strong>the</strong><br />
Decision on Group Objectives and Principles for Energy Policy<br />
does not establish legally binding commitments, <strong>the</strong><br />
Governments <strong>of</strong> Participating Countries express <strong>the</strong>ir firm<br />
political determination that, taking into account <strong>the</strong>ir<br />
individual energy circumstances, <strong>the</strong>y will give effect to this<br />
Decision in carrying out <strong>the</strong>ir policies” [<strong>IEA</strong>/GB(77)52, Item<br />
2(d); Emphasis added].<br />
<strong>The</strong> March 1979 “Action on <strong>the</strong> Oil Market Situation in 1979”<br />
in which <strong>the</strong> Board “adopted” <strong>the</strong> measure which contained a<br />
number <strong>of</strong> commitments in statements that <strong>the</strong> Board “agreed”,<br />
<strong>20</strong>9
which on <strong>the</strong>ir face indicated <strong>the</strong> taking <strong>of</strong> legal obligations to<br />
carry out <strong>the</strong> terms <strong>of</strong> <strong>the</strong> measure; in order to counter that<br />
outcome, <strong>the</strong> Board’s Conclusions on this item stated that “in<br />
doing so [<strong>the</strong> Board] agreed that although <strong>the</strong> Governments <strong>of</strong><br />
Participating Countries were not <strong>the</strong>reby establishing legally<br />
binding commitments, <strong>the</strong>y were expressing <strong>the</strong>ir firm political<br />
determination to give effect to this Action” [See <strong>IEA</strong>/GB(79)8,<br />
Item 3(a); Emphasis added].<br />
<strong>The</strong> October 1980 “Measures Agreed by <strong>IEA</strong> Member<br />
Countries” raised a parallel problem because this text also used<br />
a s<strong>of</strong>tening formulation; here <strong>the</strong> legal problem was considered<br />
when <strong>the</strong> Board agreed that “Governments understand that no<br />
change in legislation or regulations is required, but that <strong>the</strong><br />
result indicated is to be achieved by use <strong>of</strong> political influence in<br />
order to convince market participants within <strong>the</strong>ir jurisdictions<br />
that <strong>the</strong> behavior indicated is called for by <strong>the</strong> situation” [See<br />
<strong>IEA</strong>/GB(80)61, Item 2(c)].<br />
<strong>The</strong> December 1980 Ministerial “Decision by <strong>the</strong> Governing<br />
Board for Correcting Imbalances” was adopted by language<br />
stating: “<strong>The</strong> Governing Board DECIDES that” and “Each<br />
government will” act as stated. Under <strong>the</strong> rubric “Legal<br />
Aspects”, however, <strong>the</strong> decision s<strong>of</strong>tened <strong>the</strong> legal effect by<br />
stating that “Governments agree to look into aspects <strong>of</strong> <strong>the</strong>ir<br />
legal situation which relate to <strong>the</strong> implementation <strong>of</strong> this<br />
decision, with a view to improving its efficiency and<br />
effectiveness” [See <strong>IEA</strong>/GB(80)97, Item 2(g) and Annex I],<br />
<strong>the</strong>reby leaving a question as to <strong>the</strong> intention.<br />
In o<strong>the</strong>r cases <strong>of</strong> apparently legally binding decisions, Conclusions or o<strong>the</strong>r<br />
actions, when no legal clarification is made by <strong>the</strong> Governing Board, it is<br />
necessary to determine <strong>the</strong> legal effect by interpretation. So far in <strong>the</strong><br />
history <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, <strong>the</strong> Governing Board has not discussed this<br />
interpretation question directly.<br />
(b) Legal Commitments<br />
Aside from deciding upon a host <strong>of</strong> internal matters <strong>of</strong> finance,<br />
administration, housekeeping and procedure, <strong>the</strong> Governing Board has<br />
210
employed its legally binding decision powers moderately. Legal decisions<br />
have <strong>the</strong> advantage <strong>of</strong> greater inherent formality as well as <strong>the</strong> benefit, at<br />
least <strong>the</strong>oretically, <strong>of</strong> qualifying for <strong>the</strong> application <strong>of</strong> sanctions under<br />
international law. However, governments are <strong>of</strong>ten reluctant to take legal<br />
commitments because <strong>the</strong>y might have to satisfy more demanding internal<br />
legal procedures and because <strong>of</strong> <strong>the</strong> risk that agreement <strong>of</strong> Members might<br />
be more difficult to obtain for legal ra<strong>the</strong>r than political commitments.<br />
<strong>The</strong> latter consideration sometimes translates into <strong>the</strong> need to adopt a<br />
lower common denominator and <strong>the</strong> need to weaken <strong>the</strong> measure’s<br />
substantive application in order to reach agreement. Moreover, sometimes<br />
a measure that begins as a legal commitment in <strong>the</strong> negotiation stage can<br />
be finally acceptable only as a political commitment. Sometimes a political<br />
commitment expressed in rhetorical ra<strong>the</strong>r than legal language by<br />
Ministers can have a greater substantive impact. Hence despite <strong>the</strong> loss <strong>of</strong><br />
legal formality and status, <strong>the</strong> gain can be more extensive substantive<br />
reach and stronger rhetoric. When <strong>the</strong> political will is present, <strong>the</strong>re may<br />
ultimately be greater advantage in <strong>the</strong> political ra<strong>the</strong>r than <strong>the</strong> legal<br />
approach. This has <strong>of</strong>ten been <strong>the</strong> outcome for <strong>the</strong> <strong>IEA</strong> and explains why<br />
<strong>the</strong>re are relatively few legally binding substantive energy policy decisions,<br />
despite <strong>the</strong> number <strong>of</strong> actions which appear to be legal decisions on<br />
account <strong>of</strong> <strong>the</strong>ir form. As seen above, some <strong>of</strong> those decisions have been<br />
adopted in <strong>the</strong> end as political decisions with little or no substantive legal<br />
effect.<br />
A legal commitment is one which goes beyond political intention and<br />
expectation to include an undertaking not only to carry out <strong>the</strong> adopted<br />
policy lines, but also to refrain from any policy measures inconsistent with<br />
<strong>the</strong>m. In adopting legal commitments, governments accept obligations<br />
under international law which are formally binding upon <strong>the</strong>m in<br />
accordance with <strong>the</strong>ir terms, in <strong>the</strong> sense that an international treaty or<br />
agreement is binding under <strong>the</strong> rules <strong>of</strong> international law, for <strong>the</strong> legally<br />
binding force <strong>of</strong> a Governing Board decision is derived from <strong>the</strong> powers<br />
conferred upon <strong>the</strong> Board by a treaty, i.e. <strong>the</strong> I.E.P. Agreement. A legal<br />
commitment would, in <strong>the</strong> language <strong>of</strong> <strong>the</strong> Vienna Convention on <strong>the</strong> Law<br />
<strong>of</strong> Treaties, be “binding upon <strong>the</strong> parties to it and must be performed by<br />
<strong>the</strong>m in good faith” [Article 26], and a party to a legal commitment “may<br />
not invoke <strong>the</strong> provisions <strong>of</strong> its internal law as justification for its failure to<br />
perform a treaty” [Article 27].<br />
International legal obligations are normally taken by treaty or by<br />
o<strong>the</strong>r formal agreement, but in <strong>the</strong> <strong>IEA</strong> legal obligations may be taken<br />
by governments in <strong>the</strong> form <strong>of</strong> Governing Board decisions, pursuant to<br />
211
Article 52.1 quoted above. When <strong>the</strong> appropriate intent and form <strong>of</strong><br />
decision are present, <strong>the</strong> legal commitment is derived from Article 52.1,<br />
which in turn derives its legal authority from <strong>the</strong> international treaty rules<br />
mentioned above. To adopt a legally binding commitment, <strong>the</strong> Governing<br />
Board must employ language which conveys legal commitment, such<br />
as a statement that “Members shall”, “must”, “agree” (or some such<br />
formulation which expresses <strong>the</strong> intention to make binding promises). It<br />
comes as no surprise that <strong>the</strong> <strong>IEA</strong> rule for adopting legal obligations not<br />
already specified in <strong>the</strong> I.E.P. Agreement requires <strong>the</strong> action to be taken by<br />
unanimity under Article 61.1(b) [See Section A-13]. As a formal matter,<br />
Members’ internal law may require that legal obligations be referred to<br />
national legislative bodies or comply with o<strong>the</strong>r consent to be bound<br />
procedures.<br />
<strong>The</strong> sanctions applicable to legal obligations normally include all <strong>of</strong><br />
<strong>the</strong> sanctions <strong>of</strong> political commitments, supplemented by <strong>the</strong> sanctions <strong>of</strong> an<br />
obligation under international law. <strong>The</strong>oretically in particular cases <strong>the</strong>re<br />
may be greater political and moral force to <strong>the</strong> sanction <strong>of</strong> legal obligations,<br />
and in appropriate cases formal sanctions and procedures which <strong>the</strong><br />
international system attaches to legal obligations may also be invoked,<br />
although nothing <strong>of</strong> this sort is known to have occurred with respect to a<br />
legal commitment taken in <strong>the</strong> <strong>IEA</strong>.<br />
None <strong>of</strong> <strong>the</strong> legally binding decisions taken by <strong>the</strong> Governing Board<br />
has recited specifically or o<strong>the</strong>rwise indicated that <strong>the</strong> decision was being<br />
taken pursuant to Article 52.1, which makes <strong>the</strong>m binding. However, <strong>the</strong>re<br />
are many substantive energy policy decisions which may be considered<br />
legally binding decisions under <strong>the</strong> I.E.P. Agreement, and a few <strong>of</strong> <strong>the</strong>m are<br />
given below.<br />
In <strong>the</strong> 1976 Long-Term Co-operation Programme [<strong>IEA</strong>/GB(76)5,<br />
Item 2], <strong>the</strong> following provisions were adopted in legally binding form:<br />
■<br />
■<br />
■<br />
■<br />
Chapter I, paragraph 1: “<strong>The</strong> Participating Countries . . . agree to<br />
implement a Programme <strong>of</strong> Long-Term Co-operation on energy”.<br />
Chapter II, paragraph 1: “<strong>The</strong> Participating Countries shall establish<br />
national programmes and undertake co-operative activities in energy<br />
conservation”.<br />
Chapter II, paragraph 2: “<strong>The</strong> Participating Countries shall establish<br />
conservation objectives for <strong>the</strong> group . . . “.<br />
Chapter II, paragraph 3: “. . . Participating Countries agree to<br />
conduct within <strong>the</strong> Agency periodic reviews <strong>of</strong> <strong>the</strong>ir national<br />
programmes and policies relating to conservation”.<br />
212
■<br />
■<br />
■<br />
■<br />
■<br />
Chapter III: includes parallel and more extensive provisions in which<br />
Members “agree” to actions concerning <strong>the</strong> development <strong>of</strong><br />
alternative sources <strong>of</strong> energy.<br />
Chapter III D, paragraph 1: “. . . <strong>the</strong> Participating Countries shall, as<br />
a general measure <strong>of</strong> co-operation ensure that imported oil is not sold<br />
in <strong>the</strong>ir domestic markets below . . .” a specified price.<br />
Chapter IV: broad commitments whereby “. . . Participating<br />
Countries agree . . .” to actions in <strong>the</strong> R & D field.<br />
Chapter V, paragraph 1: “. . . Participating Countries . . . shall work<br />
towards <strong>the</strong> identification and removal <strong>of</strong> legislative and administrative<br />
measures which impair <strong>the</strong> achievement <strong>of</strong> <strong>the</strong> overall objectives <strong>of</strong> <strong>the</strong><br />
Programme”.<br />
Chapter V, paragraphs 2 & 3: “Participating Countries shall use <strong>the</strong>ir<br />
best endeavours . . .” to afford <strong>IEA</strong> country nationals no less than<br />
national treatment and to refrain from introducing legislation or<br />
administrative regulations which would prevent <strong>the</strong>m from doing so.<br />
In <strong>the</strong> Emergency Management Manual <strong>the</strong>re are a number <strong>of</strong> legal<br />
commitments taken by Members with respect to <strong>the</strong> procedures for carrying<br />
out <strong>the</strong> Emergency Sharing System. Perhaps <strong>the</strong> most significant <strong>of</strong> <strong>the</strong>se<br />
commitments is <strong>the</strong> decision that Members take “Type 3” mandatory supply<br />
actions in certain situations [See Emergency Management Manual (EMM),<br />
4th Ed. 1982, p. 32 Step 9 iv)]:<br />
■<br />
■<br />
If a country has an allocation right, but <strong>the</strong> oil that could be used to<br />
meet such allocation right is under <strong>the</strong> control <strong>of</strong> ano<strong>the</strong>r country<br />
(e.g. oil in onshore storage on its territory), <strong>the</strong>n that o<strong>the</strong>r country<br />
must instruct <strong>the</strong> company owning <strong>the</strong> oil as to its disposition under<br />
<strong>the</strong> IEP Agreement . . . [Emphasis added].<br />
If <strong>the</strong> oil concerned is under <strong>the</strong> control <strong>of</strong> <strong>the</strong> company involved (e.g.<br />
oil at sea), a final instruction to that company would have to be made<br />
by <strong>the</strong> government having jurisdiction <strong>of</strong> that company.<br />
In <strong>the</strong> 1990-1991 Gulf Crisis, <strong>the</strong> Governing Board adopted in legally binding<br />
form a “Co-ordinated Energy Emergency Response Contingency Plan” for use<br />
in anticipation <strong>of</strong> an oil supply shortfall in <strong>the</strong> event <strong>of</strong> hostilities in <strong>the</strong> Gulf.<br />
In <strong>the</strong> 11 January 1991 Conclusions <strong>the</strong> Board “adopted” <strong>the</strong> Plan and<br />
(c) Agreed that upon notification by <strong>the</strong> Executive Director,<br />
after prompt and wide-ranging consultation with Member<br />
213
governments, <strong>of</strong> <strong>the</strong> need to activate <strong>the</strong> contingency plan,<br />
each <strong>IEA</strong> Member country, as well as Finland, France, and<br />
Iceland, would begin implementation <strong>of</strong> <strong>the</strong>ir commitments<br />
under paragraph (a) above (where <strong>the</strong> commitments are<br />
described) [<strong>IEA</strong>/GB(91)1, Item 3(b) and Annex paragraphs<br />
(a) and (c)].<br />
This was confirmed at its 28 January 1991 meeting when <strong>the</strong> Board :<br />
(a) Decided that <strong>the</strong> co-ordinated energy emergency contingency<br />
plan, adopted at its 11th January 1991 meeting and<br />
which makes available to <strong>the</strong> market 2.5 million barrels <strong>of</strong> oil<br />
per day, would remain in effect and that it would continue to<br />
be implemented flexibly in close consultation with <strong>the</strong><br />
Executive Director [<strong>IEA</strong>/GB(91)3, Item 2(b) and Annex].<br />
In addition to <strong>the</strong>se substantive energy policy and operational decisions,<br />
<strong>the</strong> Board has adopted many o<strong>the</strong>r legally binding decisions each year in <strong>the</strong><br />
sectors <strong>of</strong> finance, administration and housekeeping and on procedural questions.<br />
<strong>The</strong>se more or less internal operating actions are usually stated with such<br />
formulations as “<strong>the</strong> Governing Board decided”, “adopted”, “agreed”,<br />
“concluded”, “instructed”, “requested”, or “endorsed”, and <strong>the</strong>y appear as<br />
“decisions”, “conclusions” or o<strong>the</strong>r actions. Usually <strong>the</strong> context makes <strong>the</strong> legally<br />
binding intent clear, as for example <strong>the</strong> decision each year “fixing” <strong>the</strong> Members’<br />
scale <strong>of</strong> contributions [See e.g. for <strong>the</strong> 1993 scale <strong>IEA</strong>/GB(93)11, Item 7(d)].<br />
Problems <strong>of</strong> interpretation do arise when a measure is adopted in<br />
language which could be employed to express ei<strong>the</strong>r a political or a legal<br />
commitment. Indeed, this problem can arise even when <strong>the</strong> language<br />
standing alone would seem ra<strong>the</strong>r clear, as in <strong>the</strong> case <strong>of</strong> actions called<br />
“decisions”. Most decisions can be taken as legally binding under Article 52.1<br />
quoted above, but not all. When <strong>the</strong> context indicates a political ra<strong>the</strong>r than a<br />
legal intent, even <strong>the</strong> word “decision” loses its legal power and <strong>the</strong> action<br />
becomes a political decision, as when <strong>the</strong> Board would “decide to recommend”<br />
or “decide that Members should” (or adopt o<strong>the</strong>r formulations to that<br />
effect). This has occurred a number <strong>of</strong> times. For example, in connection<br />
with <strong>the</strong> phased increase in <strong>the</strong> emergency reserve commitment in 1976 from<br />
60 to 90 days, to take place over a three to four year period, <strong>the</strong> Board<br />
decided that, in order to avoid an adverse impact on <strong>the</strong> oil<br />
market <strong>of</strong> <strong>the</strong> incremental oil demand for stock building,<br />
214
Participating Countries should ensure that <strong>the</strong> build-up <strong>of</strong><br />
emergency reserves is spread as evenly as possible over <strong>the</strong><br />
period . . . [Emphasis added; <strong>IEA</strong>/GB(76)53, Item 2(b)(4)].<br />
What started <strong>the</strong>re as a “decision” in a legally binding sense, ends as a<br />
“recommendation” by <strong>the</strong> use <strong>of</strong> <strong>the</strong> word “should” as <strong>the</strong> final operative term.<br />
With some expressions, however, ambiguity is inherent, as when <strong>the</strong><br />
Governing Board “concluded” or “adopted an action” or simply “noted”<br />
written or oral material. Unless <strong>the</strong> Board itself clarifies its intent, as it did<br />
in <strong>the</strong> case <strong>of</strong> <strong>the</strong> March 1979 Action and parallel cases cited above in<br />
Section 16(a), <strong>the</strong>re is need for interpretation. Since <strong>the</strong> Board’s discussions<br />
have rarely provided substantial guidance, for <strong>the</strong> measures have been<br />
adopted usually without discussion <strong>of</strong> this question, that leaves <strong>the</strong> general<br />
context as <strong>the</strong> chief aid in determining intention in practice. In cases where<br />
<strong>the</strong> Board “noted” a document or particular formulation or discussion, that<br />
could mean simply that <strong>the</strong> Board acknowledged being so informed or that<br />
a discussion took place, without fur<strong>the</strong>r institutional consequence.<br />
However, <strong>the</strong> term “noted” could also mean more, for instance in cases<br />
where <strong>the</strong> noted material contains statements <strong>of</strong> <strong>the</strong> Executive Director’s<br />
intent to carry out specific actions. “Noted” <strong>the</strong>n normally means<br />
“approval” or “authorization” or at least “acquiescence” in <strong>the</strong> described<br />
actions. In any <strong>of</strong> <strong>the</strong>se ambiguous situations, when questions arise it would<br />
always be open to <strong>the</strong> Board itself to make a follow-up clarifying decision,<br />
but to date <strong>the</strong> Board has not had occasion to do so.<br />
(c) Recommendations<br />
In formal terms an <strong>IEA</strong> Governing Board “recommendation” involves both<br />
legal and political commitments, although <strong>the</strong> political element clearly<br />
predominates. <strong>The</strong> I.E.P. Agreement authorizes <strong>the</strong> Board to make<br />
recommendations by majority [Article 61.1(a)] and states that<br />
“Recommendations shall not be binding” [Article 52.2], although <strong>the</strong>y are<br />
clearly applicable in accordance with <strong>the</strong>ir terms to Members which opposed<br />
<strong>the</strong> measure as well as to those which supported it [Emphasis added; See<br />
Section A-13 above]. In <strong>the</strong> OECD this non-binding sense <strong>of</strong> <strong>the</strong> word<br />
“recommendation” is expressed in Rule 18 b) <strong>of</strong> <strong>the</strong> Rules <strong>of</strong> Procedure as<br />
follows: “Recommendations <strong>of</strong> <strong>the</strong> Organisation . . . shall be submitted to <strong>the</strong><br />
Members for consideration in order that <strong>the</strong>y may, if <strong>the</strong>y consider it<br />
opportune, provide for <strong>the</strong>ir implementation”. In <strong>the</strong> <strong>IEA</strong> recommendations<br />
are “not binding”, in <strong>the</strong> sense that <strong>the</strong>y establish no legal obligation to carry<br />
215
out <strong>the</strong> terms <strong>of</strong> <strong>the</strong> recommendation or to achieve its objectives. However,<br />
<strong>the</strong>re is an implied commitment, particularly for those supporting <strong>the</strong><br />
adoption <strong>of</strong> <strong>the</strong> recommendation, to make some effort toward achieving <strong>the</strong><br />
measures’ objectives, including where appropriate to submit <strong>the</strong> measure to<br />
<strong>the</strong>ir competent national authorities. At a minimum <strong>the</strong>re would be an<br />
implied commitment not to oppose implementation <strong>of</strong> <strong>the</strong> recommendation<br />
and not to obstruct <strong>the</strong> implementation efforts <strong>of</strong> o<strong>the</strong>r Members.<br />
<strong>The</strong>re is no particular magic in <strong>the</strong> language which might be employed<br />
to adopt recommendations, and whatever language conveys <strong>the</strong> notion <strong>of</strong><br />
recommendation is sufficient. Although <strong>the</strong> measure could be clearly<br />
designated as a “Recommendation”, <strong>the</strong> Board’s Conclusion usually has<br />
stated simply that <strong>the</strong> Board “recommends” a particular line <strong>of</strong> action. In<br />
Ministerial Communiqués, <strong>the</strong>re have been passages framed specifically as<br />
recommendations, as in <strong>the</strong> 1991 Ministerial meeting when “Ministers<br />
recommended that Member countries with stock obligations streng<strong>the</strong>n,<br />
where necessary, government control over emergency industry stocks and/or<br />
increase government-owned or controlled stocks” [<strong>IEA</strong>/GB(91)46, Item 3,<br />
Annex Communiqué, paragraph 6]. <strong>The</strong>re were many recommendations<br />
adopted by <strong>the</strong> Governing Board at <strong>of</strong>ficial level during <strong>the</strong> 1990-1991 Gulf<br />
Crisis. For example, <strong>the</strong> Board on 11 January 1991 [<strong>IEA</strong>/GB(91)1, Annex]:<br />
(f)<br />
Recommended that oil companies continue to draw on<br />
<strong>the</strong>ir commercial stocks, that governments and consumers<br />
maintain and intensify <strong>the</strong>ir conservation efforts, and<br />
that oil companies and consumers exercise restraint in<br />
purchases, in order to reduce uncertainty and volatility in<br />
<strong>the</strong> world oil market.<br />
Of course any o<strong>the</strong>r formulation which carries a hortatory sense, like <strong>the</strong><br />
Board “urges”, “invites”, “requests”, “aims to”, “expects” or which states<br />
that Members “should” or “ought to” would normally carry <strong>the</strong> status <strong>of</strong> a<br />
recommendation unless <strong>the</strong> context or o<strong>the</strong>r indications clearly disclose a<br />
different intention.<br />
Formal sanctions cannot be invoked for a Member’s failure to carry<br />
out a recommendation, but such failure could trigger a review procedure or<br />
lead to <strong>the</strong> adoption <strong>of</strong> o<strong>the</strong>r measures which might be employed to<br />
mobilize political responses <strong>of</strong> <strong>the</strong> o<strong>the</strong>r Members. <strong>The</strong>refore, it cannot be<br />
said that a Member which fails to carry out a recommendation, even a<br />
Member in <strong>the</strong> minority opposing it, would necessarily find itself altoge<strong>the</strong>r<br />
free from <strong>the</strong> risk <strong>of</strong> adverse consequences.<br />
216
17. Creation <strong>of</strong> O<strong>the</strong>r Organs<br />
In addition to <strong>the</strong> Governing Board which is <strong>the</strong> supreme organ <strong>of</strong> <strong>the</strong><br />
Agency, <strong>the</strong> I.E.P. Agreement [Article 49.1] also established <strong>the</strong><br />
Management Committee and <strong>the</strong> four Standing Groups on Emergency<br />
Questions (SEQ), <strong>the</strong> Oil Market (SOM), Long-Term Co-operation (SLT)<br />
and Relations with Producer and o<strong>the</strong>r Consumer Countries (SPC). While<br />
<strong>the</strong>se are <strong>the</strong> sole organs established directly by <strong>the</strong> I.E.P. Agreement, and<br />
<strong>the</strong>y may be abolished or modified only by amendment <strong>of</strong> <strong>the</strong> Agreement,<br />
<strong>the</strong>re is a provision in <strong>the</strong> I.E.P. Agreement empowering <strong>the</strong> Governing<br />
Board to establish o<strong>the</strong>r organs and to delegate functions to <strong>the</strong>m.<br />
Those powers are stated briefly in Articles 49.2 and 51.3. After<br />
referring in Article 49.1 to <strong>the</strong> organs identified above as being directly<br />
created by <strong>the</strong> I.E.P. Agreement, Article 49.2 states that:<br />
<strong>The</strong> Governing Board or <strong>the</strong> Management Committee may,<br />
acting by majority, establish any o<strong>the</strong>r organ necessary for <strong>the</strong><br />
implementation <strong>of</strong> <strong>the</strong> Program.<br />
While no fur<strong>the</strong>r mention need be made <strong>of</strong> <strong>the</strong> Management Committee in<br />
this Section (for its meetings have been merged into those <strong>of</strong> <strong>the</strong> Board; see<br />
Section A-<strong>20</strong> below), <strong>the</strong> Board has availed itself <strong>of</strong> this power to establish a<br />
few additional organs and has delegated functions to <strong>the</strong>m in accordance<br />
with Article 51.3 which provides that<br />
<strong>The</strong> Governing Board, acting by majority, may delegate any <strong>of</strong><br />
its functions to any o<strong>the</strong>r organ <strong>of</strong> <strong>the</strong> Agency.<br />
<strong>The</strong> organs which have been established under <strong>the</strong> foregoing powers are <strong>the</strong><br />
following:<br />
■<br />
■<br />
■<br />
■<br />
<strong>The</strong> Committee on Budget and Expenditure (BC), and its Open<br />
Ended Working Group.<br />
<strong>The</strong> Committee on Energy Research and Technology (CERT), known<br />
earlier as <strong>the</strong> Committee on Energy Research and Development<br />
(CRD) and first established as <strong>the</strong> SLT Sub-group on Research and<br />
Development.<br />
<strong>The</strong> Committee on Non-Member Countries (NMC), known earlier as<br />
<strong>the</strong> Ad Hoc Group on International Energy Relations (AHGIER).<br />
<strong>The</strong> [Oil] Industry Advisory Board (IAB), its Subcommittees and its<br />
Ad Hoc Group, <strong>the</strong> Industry Supply Advisory Group (ISAG).<br />
217
■<br />
<strong>The</strong> Coal Industry Advisory Board (CIAB) and its Special Committee.<br />
In establishing <strong>the</strong>se new organs <strong>the</strong> Governing Board is not<br />
constrained, under <strong>the</strong> authorities cited above, as to <strong>the</strong> function,<br />
composition or duration <strong>of</strong> <strong>the</strong> “o<strong>the</strong>r organs”, for all those questions are left<br />
to <strong>the</strong> discretion <strong>of</strong> <strong>the</strong> Governing Board. Aside from <strong>the</strong> IAB, <strong>the</strong> CIAB,<br />
<strong>the</strong>ir subordinate bodies, and <strong>the</strong> ad hoc groups and working parties referred<br />
to below, <strong>the</strong> organs created by <strong>the</strong> Board are plenary bodies <strong>of</strong> <strong>the</strong> Agency,<br />
composed <strong>of</strong> all its Members or open to <strong>the</strong>m and without any limitation on<br />
<strong>the</strong> duration <strong>of</strong> <strong>the</strong> organ. Typically <strong>the</strong>ir mandates were fixed initially on a<br />
broad substantive basis covering <strong>the</strong> sector referred to in <strong>the</strong> name <strong>of</strong> <strong>the</strong><br />
organ, supplemented with specific requests for reports or o<strong>the</strong>r actions from<br />
time to time, as for <strong>the</strong> Standing Groups. In addition, <strong>the</strong>re have been<br />
important groups and working parties established by <strong>the</strong> Standing Groups<br />
and Committees <strong>the</strong>mselves.<br />
(a) Committee on Budget and Expenditure (BC)<br />
<strong>The</strong> first organ created by <strong>the</strong> Governing Board was <strong>the</strong> Committee on<br />
Budget and Expenditure, established at <strong>the</strong> Board’s first meeting on 18-19<br />
November <strong>1974</strong><br />
(a)<br />
. . . to advise <strong>the</strong> Governing Board on financial administration<br />
<strong>of</strong> <strong>the</strong> Agency and to give its opinion on <strong>the</strong> Annual<br />
and o<strong>the</strong>r budget proposals submitted to <strong>the</strong> Governing<br />
Board [See <strong>IEA</strong>/ GB(74)9(1st Revision), Item 12(a);<br />
anticipated in <strong>the</strong> Council Decision, Article 10(a)].<br />
<strong>The</strong> Board also instructed <strong>the</strong> Committee to “establish a small working<br />
group which <strong>the</strong> Executive Director could consult regarding expenditure<br />
necessary in <strong>the</strong> fulfilment <strong>of</strong> <strong>the</strong> tasks <strong>of</strong> <strong>the</strong> Agency” [<strong>IEA</strong>/GB(74)9(1st<br />
Revision), Item 10(b)(6)], which has not been convened for many years.<br />
<strong>The</strong> Committee has met regularly in accordance with its mandate,<br />
usually twice each year, in <strong>the</strong> summer and autumn. <strong>The</strong> working group,<br />
known as <strong>the</strong> “Open-ended Group” has met informally on a few occasions<br />
at <strong>the</strong> request <strong>of</strong> <strong>the</strong> Executive Director to consider particular financial or<br />
administrative questions.<br />
(b) Committee on Energy Research and Technology (CERT)<br />
<strong>The</strong> work <strong>of</strong> <strong>the</strong> Committee on Energy Research and Technology was<br />
initially carried out by <strong>the</strong> Standing Group on Long-Term Co-operation<br />
218
(SLT) pursuant to its mandate provided in Article 42(c) <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement and to specific mandates adopted by <strong>the</strong> Board. <strong>The</strong> SLT was<br />
assisted by its Sub-Group on R & D which also received direct mandates<br />
from <strong>the</strong> Board [See <strong>IEA</strong>/GB(75)17, Item 2(c) and Annex III]. However, in<br />
less than a year <strong>of</strong> R & D work in <strong>the</strong> SLT, it became clear that <strong>the</strong> R & D<br />
work warranted <strong>the</strong> establishment <strong>of</strong> a Committee devoted principally to R<br />
& D with high-level specialist R & D representation in place <strong>of</strong> <strong>the</strong> SLT’s<br />
much broader long-term energy policy responsibilities. In order to meet<br />
those concerns <strong>the</strong> Governing Board established <strong>the</strong> Committee on Energy<br />
Research and Development on <strong>20</strong>-21 December 1975 with a specialized R<br />
& D mandate [<strong>IEA</strong>/GB(75)94, Item 7, Annex II]. <strong>The</strong> Preamble to <strong>the</strong><br />
decision referred to <strong>the</strong> Board’s desire “to establish a body <strong>of</strong> adequate<br />
status to be responsible for energy research and development”. <strong>The</strong> new<br />
Committee would ensure co-ordination through “regular consultation and<br />
collaboration” with <strong>the</strong> SLT [paragraph (b)] and would report to <strong>the</strong><br />
Governing Board, as appropriate, but not less than once a year, “in<br />
conjunction with” <strong>the</strong> SLT [paragraph (f)].<br />
As <strong>the</strong> scope <strong>of</strong> <strong>the</strong> Committee’s work included broader issues <strong>of</strong><br />
energy technology, and not merely energy research and development, it<br />
became necessary to reflect that development in <strong>the</strong> name <strong>of</strong> <strong>the</strong> Committee.<br />
On <strong>20</strong> March 1992, <strong>the</strong> Governing Board changed <strong>the</strong> Committee’s name<br />
to <strong>the</strong> “Committee on Energy Research and Technology” (CERT)<br />
[<strong>IEA</strong>/GB(92)17, Item 8(b)].<br />
(c) Committee on Non-Member Countries (NMC)<br />
<strong>IEA</strong> work in <strong>the</strong> field <strong>of</strong> relations with non-Member countries was initially<br />
assigned to <strong>the</strong> Standing Group on Relations with Producer and o<strong>the</strong>r<br />
Consumer Countries, as provided in Articles 44-48 <strong>of</strong> <strong>the</strong> I.E.P Agreement.<br />
After a few years it became apparent that a more suitable representation<br />
could be arranged more easily through meetings <strong>of</strong> an ad hoc nature, and<br />
for that purpose <strong>the</strong> Governing Board on 27-28 June 1977:<br />
(a) established an informal Ad Hoc Group on International<br />
Energy Relations . . . to report to <strong>the</strong> Governing Board on<br />
international energy relations and to carry out such o<strong>the</strong>r<br />
functions as may be assigned to it by <strong>the</strong> Governing Board<br />
[<strong>IEA</strong>/GB(77)33, Item 8].<br />
This action also carried <strong>the</strong> advantage <strong>of</strong> showing more clearly in its name<br />
<strong>the</strong> actual role <strong>of</strong> <strong>the</strong> Group. After <strong>the</strong> Ad Hoc Group was created, <strong>the</strong>re<br />
219
was no need for <strong>the</strong> Standing Group to continue to meet, for its functions<br />
were fully and effectively assumed by <strong>the</strong> Ad Hoc Group, and it ceased to<br />
meet <strong>the</strong>reafter. <strong>The</strong> Standing Group still exists under <strong>the</strong> I.E.P. Agreement<br />
(a formal amendment would be required to remove it institutionally), and<br />
for a number <strong>of</strong> years a Chairman was elected (<strong>the</strong> same person was elected<br />
at <strong>the</strong> same time as Chairman <strong>of</strong> <strong>the</strong> Ad Hoc Group), but <strong>the</strong> work <strong>of</strong> <strong>the</strong><br />
Standing Group as such has remained suspended.<br />
A fur<strong>the</strong>r name change, designed to reflect <strong>the</strong> more or less permanent<br />
role <strong>of</strong> <strong>the</strong> Group and its particular focus on non-Member countries, was<br />
adopted in 1990. <strong>The</strong> Governing Board approved <strong>the</strong> name change to <strong>the</strong><br />
“Committee on Non-Member Countries”, which it retains to <strong>the</strong> present day<br />
[<strong>IEA</strong>/GB(90)46, Item 6].<br />
(d) Industry Advisory Board (IAB)<br />
<strong>The</strong> Governing Board has created two principal industry advisory bodies,<br />
which are <strong>the</strong> Industry Advisory Board (IAB) on oil and <strong>the</strong> Coal Industry<br />
Advisory Board (CIAB), toge<strong>the</strong>r with <strong>the</strong>ir subordinate bodies also created<br />
directly by <strong>the</strong> Board. Unlike <strong>the</strong> o<strong>the</strong>r organs described above, Agency<br />
Members are not members <strong>of</strong> <strong>the</strong> advisory bodies. In <strong>the</strong> case <strong>of</strong> <strong>the</strong> IAB,<br />
<strong>the</strong>re are tight restrictions on <strong>the</strong> presence <strong>of</strong> <strong>IEA</strong> Member country<br />
representatives in <strong>the</strong> meeting room, while <strong>the</strong>re are no such restrictions on<br />
access to <strong>the</strong> CIAB. A third body called <strong>the</strong> Industry Working Party (IWP)<br />
advises <strong>the</strong> Standing Group on <strong>the</strong> Oil Market (SOM), but it was not<br />
actually established by <strong>the</strong> Board. <strong>The</strong> IWP was created by its oil industry<br />
members and it is recognized by <strong>the</strong> Agency. However, it is not an “organ”<br />
established by <strong>the</strong> Agency in <strong>the</strong> sense <strong>of</strong> I.E.P. Agreement Article 49.2 and<br />
thus it is not taken up fur<strong>the</strong>r in this Section. It has not been necessary to<br />
convene this Group in recent years.<br />
<strong>The</strong> IAB and its subordinate bodies were created by <strong>the</strong> Governing<br />
Board initially in <strong>1974</strong> in response to Article 19.7 <strong>of</strong> <strong>the</strong> I.E.P. Agreement<br />
which provides that<br />
An international advisory board from <strong>the</strong> oil industry shall be<br />
convened, not later than <strong>the</strong> activation <strong>of</strong> emergency measures,<br />
to assist <strong>the</strong> Agency in ensuring <strong>the</strong> effective operation <strong>of</strong> such<br />
measures.<br />
<strong>The</strong> Industry Advisory Board was formally established on 5-7 February<br />
1975 [<strong>IEA</strong>/GB(75)8, Item 5, Annex III, a)(12)]. <strong>The</strong> IAB’s function is to<br />
provide expert industry advice and consultation on emergency oil sharing<br />
2<strong>20</strong>
and related questions. This continues on a regular basis with <strong>the</strong> IAB<br />
providing assistance in <strong>the</strong> fur<strong>the</strong>r development and testing <strong>of</strong> <strong>the</strong><br />
Emergency Sharing System, which is indispensable to <strong>the</strong> viability <strong>of</strong> <strong>the</strong><br />
System. Similarly, in an oil supply emergency, <strong>the</strong> IAB would provide vital<br />
services to <strong>the</strong> Agency, including industry advice and consultations on <strong>the</strong><br />
emergency situation. <strong>The</strong> IAB’s Industry Supply Advisory Group (ISAG)<br />
would <strong>the</strong>n be responsible for assisting and advising <strong>the</strong> Agency on <strong>the</strong><br />
practical operation <strong>of</strong> <strong>the</strong> System and on individual oil supply movements<br />
[For <strong>the</strong> IAB’s detailed mandate, see also <strong>the</strong> Emergency Management<br />
Manual (EMM), 4th Ed. 1982, p. 58].<br />
(e) Coal Industry Advisory Board (CIAB)<br />
<strong>The</strong> creation <strong>of</strong> <strong>the</strong> CIAB responded to <strong>the</strong> recognized need “for <strong>the</strong><br />
establishment <strong>of</strong> a mechanism for individuals <strong>of</strong> high standing active in<br />
coal-related enterprises to provide advice and suggestions on coal<br />
production, trade and utilization and on related subjects”. It was<br />
established by <strong>the</strong> Board’s decision <strong>of</strong> 11 July 1979 [<strong>IEA</strong>/GB(79)49, Item<br />
5(b) and Annex], as was <strong>the</strong> Special Committee which is <strong>the</strong> CIAB coordinating<br />
body. <strong>The</strong> CIAB provides an independent forum in which<br />
leaders <strong>of</strong> major coal-related enterprises in <strong>IEA</strong> Member countries meet with<br />
Agency <strong>of</strong>ficials to give advice on ways to improve production, trade and<br />
use <strong>of</strong> coal. <strong>The</strong> CIAB also assists <strong>the</strong> <strong>IEA</strong> “in <strong>the</strong> practical implementation<br />
<strong>of</strong> <strong>the</strong> Principles for <strong>IEA</strong> Action on Coal”. It regularly provides high level,<br />
high quality industry advice to <strong>the</strong> Standing Group on Long Term Cooperation<br />
and to <strong>the</strong> Governing Board at Ministerial as well as <strong>of</strong>ficial level.<br />
In addition to <strong>the</strong>se permanent organs, from time to time <strong>the</strong><br />
Governing Board has created ad hoc groups or working parties, but <strong>the</strong>y<br />
have been few in number and <strong>of</strong> relatively brief duration. <strong>The</strong> most<br />
important <strong>of</strong> <strong>the</strong>se was doubtless <strong>the</strong> High Level Ad Hoc Group created in<br />
1981 by <strong>the</strong> Board to consider oil supply disruptions and new <strong>IEA</strong> actions,<br />
in response to <strong>the</strong> institutional concerns encountered in <strong>the</strong> 1979-1981<br />
Middle East crisis and <strong>the</strong> resulting oil supply disruptions. On 3 February<br />
1981 <strong>the</strong> Board, in an unusual action, elected <strong>the</strong> Executive Director as<br />
Chairman and requested <strong>the</strong> Group “to begin its work in considering shortterm<br />
measures and to report on <strong>the</strong> progress <strong>of</strong> its work to <strong>the</strong> Governing<br />
Board as soon as possible” [See <strong>IEA</strong>/GB(81)10, Item 5]. <strong>The</strong> following<br />
June, <strong>the</strong> Ad Hoc Group’s work was reported to <strong>the</strong> Ministerial Level<br />
Governing Board meeting which provided guidance for fur<strong>the</strong>r work<br />
[<strong>IEA</strong>/GB(81)33, pp. 2-4]. An additional report was received by <strong>the</strong> Board<br />
221
at <strong>of</strong>ficial level in November [<strong>IEA</strong>/GB(81)75, Item 2], and on 10 December<br />
<strong>the</strong> Board adopted <strong>the</strong> Decision on Preparation for Future Supply<br />
Disruptions [<strong>IEA</strong>/GB(81)86, Item 2(b) and Annex I] which added<br />
substantially to <strong>the</strong> oil supply disruption response capabilities <strong>of</strong> <strong>the</strong> Agency.<br />
18. Special Activities<br />
While all Members <strong>of</strong> <strong>the</strong> <strong>IEA</strong> participate in <strong>the</strong> work <strong>of</strong> <strong>the</strong> organs<br />
described above and in most <strong>IEA</strong> programme activities, <strong>the</strong>re was need for<br />
an <strong>IEA</strong> mechanism for activities in which only <strong>the</strong> Members particularly<br />
interested in <strong>the</strong> activities might participate. <strong>The</strong> founders <strong>of</strong> <strong>the</strong> Agency,<br />
having examined carefully <strong>the</strong> problems in <strong>the</strong> OECD for a group <strong>of</strong> less<br />
than all <strong>of</strong> its Members to carry out autonomous programmes (that is, for<br />
<strong>the</strong> <strong>IEA</strong> itself), were sensitive to <strong>the</strong> need for <strong>the</strong> <strong>IEA</strong> to provide<br />
programmes <strong>of</strong> that kind to be carried out effectively and smoothly without<br />
institutional impediments. <strong>The</strong> purposes <strong>of</strong> <strong>the</strong> Agency would be advanced<br />
by encouraging as much international co-operation on energy as possible,<br />
even when not all <strong>of</strong> <strong>the</strong> Members could participate in every effort. <strong>The</strong>re<br />
was thus need to avoid <strong>the</strong> lowest common denominator effect for activities<br />
within <strong>the</strong> scope <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s authority (i.e. limiting activities to those in<br />
which all Members were willing and able to participate), especially when<br />
some <strong>of</strong> <strong>the</strong> Members might not be interested in a particular energy<br />
development <strong>of</strong> intense interest to some <strong>of</strong> <strong>the</strong> o<strong>the</strong>rs, or when some might<br />
not be able to participate because <strong>of</strong> financial or o<strong>the</strong>r requirements.<br />
In order for programmes <strong>of</strong> limited participation to be practicable<br />
under <strong>the</strong> aegis <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, provision needs to be made for<br />
■<br />
■<br />
■<br />
■<br />
■<br />
A group <strong>of</strong> less than <strong>the</strong> entire membership to be able to establish,<br />
within <strong>the</strong> Agency’s authority, independent activities which <strong>the</strong>y<br />
would govern and finance and from which <strong>the</strong>y would enjoy <strong>the</strong><br />
principal benefits.<br />
<strong>The</strong> decision to establish an activity in each case to be made by <strong>the</strong><br />
actual participants in <strong>the</strong> activity.<br />
Such activities not to interfere with <strong>the</strong> Emergency Sharing System,<br />
i.e. with Chapters I to V <strong>of</strong> <strong>the</strong> I.E.P. Agreement.<br />
Members not participating to abstain from voting on <strong>the</strong> activity and<br />
not to be bound by decisions concerning it.<br />
<strong>The</strong> Governing Board to be kept informed <strong>of</strong> <strong>the</strong> resulting programme<br />
activities.<br />
222
Accordingly, Article 65.1 was added to <strong>the</strong> I.E.P. Agreement as follows:<br />
Any two or more Participating Countries may decide to carry<br />
out within <strong>the</strong> scope <strong>of</strong> this Agreement special activities, o<strong>the</strong>r<br />
than activities which are required to be carried out by all<br />
Participating Countries under Chapters I to V. Participating<br />
Countries which do not wish to take part in such special<br />
activities shall abstain from taking part in such decisions and<br />
shall not be bound by <strong>the</strong>m. Participating Countries carrying<br />
out such activities shall keep <strong>the</strong> Governing Board informed<br />
<strong>the</strong>re<strong>of</strong>.<br />
To date this provision has been employed only in <strong>the</strong> field <strong>of</strong> energy<br />
research and development projects and programmes, where it has<br />
enabled some sixty activities to be carried out without <strong>the</strong> full<br />
membership’s participation, although all Members are entitled to<br />
participate with <strong>the</strong> agreement <strong>of</strong> <strong>the</strong> o<strong>the</strong>rs and are encouraged to do<br />
so. None <strong>of</strong> <strong>the</strong>se activities has attracted <strong>the</strong> participation <strong>of</strong> all<br />
Members (although some approach full participation), and some have<br />
had as few as two participants. <strong>The</strong> flexibility in this system,<br />
moreover, makes it possible for non-Members <strong>of</strong> <strong>the</strong> Agency as well to<br />
participate, and that process was formalized in <strong>the</strong> Board’s decision<br />
on “Associate Participation” adopted in 1991 [<strong>IEA</strong>/GB(91)79,<br />
Item 5(f)].<br />
In each case <strong>the</strong> Governing Board receives <strong>the</strong> proposal for <strong>the</strong> special<br />
activity toge<strong>the</strong>r with a description <strong>of</strong> <strong>the</strong> activity, <strong>the</strong> identification <strong>of</strong> <strong>the</strong><br />
expected participants, <strong>the</strong> expected duration and o<strong>the</strong>r information. All<br />
proposals which have reached <strong>the</strong> Board to date have been approved.<br />
Typically this is done by a Board Conclusion which states that <strong>the</strong> Board<br />
approves <strong>the</strong> addition to <strong>the</strong> <strong>IEA</strong> areas <strong>of</strong> research, development and<br />
demonstration <strong>of</strong> <strong>the</strong> particular programme or project “as a special activity<br />
under Article 65 <strong>of</strong> <strong>the</strong> I.E.P. Agreement” [Emphasis added; see for<br />
example, <strong>IEA</strong>/GB(93)57, Item 9(a) and Annex 2]. <strong>The</strong> Board’s Conclusions<br />
in such cases provide <strong>the</strong> formal link between <strong>the</strong> Agency and <strong>the</strong><br />
participants. <strong>The</strong> Agency becomes involved in <strong>the</strong> negotiation <strong>of</strong> <strong>the</strong> terms<br />
<strong>of</strong> <strong>the</strong> work to be carried out and in o<strong>the</strong>r arrangements, in developing <strong>the</strong><br />
Implementing Agreement to be entered into by <strong>the</strong> participants and in <strong>the</strong><br />
administration and policy aspects <strong>of</strong> <strong>the</strong> programme or project once it is<br />
under way [For consideration <strong>of</strong> <strong>the</strong> expenditure in <strong>the</strong>se cases, see Chapter<br />
VII, Section J].<br />
223
19. Conclusions and Minutes<br />
<strong>The</strong> essential purpose <strong>of</strong> Governing Board Conclusions, Minutes and <strong>the</strong> like<br />
is, <strong>of</strong> course, to make <strong>the</strong> necessary record <strong>of</strong> <strong>the</strong> meeting, in a fashion fully<br />
consistent with <strong>the</strong> operational objectives <strong>of</strong> <strong>the</strong> Agency. <strong>The</strong> record is useful,<br />
not only in preserving authoritative evidence <strong>of</strong> past actions for operational<br />
reference, but also in providing a documentary basis for reviewing<br />
developments <strong>of</strong> historical interest, for assessing <strong>the</strong> performance <strong>of</strong> Members<br />
in carrying out <strong>the</strong>ir commitments, and for evaluating <strong>the</strong> experiences <strong>of</strong> <strong>the</strong><br />
Agency. Those texts serve as <strong>the</strong> authoritative statements <strong>of</strong> <strong>the</strong> decisions,<br />
recommendations and o<strong>the</strong>r outcomes <strong>of</strong> <strong>the</strong> Board’s meetings, as an essential<br />
part <strong>of</strong> <strong>the</strong> process for establishing <strong>the</strong> authoritative texts on such important<br />
formal and legal subjects as <strong>the</strong> commitments <strong>of</strong> Members (for example, see<br />
<strong>the</strong> Governing Board’s actions in <strong>the</strong> 1990-1991 Gulf Crisis), energy policy<br />
declarations and decisions, <strong>the</strong> terms <strong>of</strong> membership for new Members,<br />
amendments <strong>of</strong> <strong>the</strong> I.E.P. Agreement, <strong>the</strong> mandates <strong>of</strong> <strong>the</strong> Standing Groups<br />
and Committees, delegations <strong>of</strong> power, terms <strong>of</strong> <strong>the</strong> Charter <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
Dispute Settlement Centre and o<strong>the</strong>r measures <strong>of</strong> that kind. In <strong>the</strong> various<br />
forms <strong>the</strong> Governing Board record takes, it is permanently preserved and it is<br />
distributed or made available to all Members to ensure that <strong>the</strong>y all work<br />
subsequently with <strong>the</strong> same documentary background.<br />
(a) Governing Board Meetings at Official Level<br />
<strong>The</strong> Agency has never considered it necessary to develop a full and complete<br />
record <strong>of</strong> Governing Board meetings, for only <strong>the</strong> minimum essential record<br />
has been required, and that has been done with procedures as sparse and<br />
simple as possible, by <strong>the</strong> use <strong>of</strong> meeting Conclusions ra<strong>the</strong>r than minutes.<br />
At its first meeting, this approach was reflected in <strong>the</strong> Board’s decisions on<br />
flexibility, efficiency and simplicity <strong>of</strong> <strong>IEA</strong> operations and procedures, and<br />
specifically on <strong>the</strong> making <strong>of</strong> minutes <strong>of</strong> Board meetings [<strong>IEA</strong>/GB(74)9(1st<br />
Revision) Preliminary Matters, paragraph (d); on <strong>the</strong> subject <strong>of</strong> operational<br />
efficiency generally, see Chapter VIII, Section A below].<br />
Specifically on <strong>the</strong> question <strong>of</strong> Minutes <strong>the</strong> Board decided this:<br />
(c) formal minutes would not be prepared in <strong>the</strong> absence <strong>of</strong> a<br />
decision specifically requesting <strong>the</strong> preparation <strong>of</strong> minutes.<br />
With <strong>the</strong> exception <strong>of</strong> <strong>the</strong> first few Ministerial meetings, <strong>the</strong> Governing<br />
Board has never had meeting minutes or summary records prepared. From<br />
<strong>the</strong> outset, <strong>the</strong> record <strong>of</strong> <strong>of</strong>ficial level meetings has been composed <strong>of</strong> two<br />
224
elements: <strong>the</strong> formal Conclusions prepared by <strong>the</strong> Secretariat for<br />
distribution to all Members and <strong>the</strong> informal handwritten meeting notes<br />
taken by <strong>the</strong> Legal Counsel and retained in <strong>the</strong> Agency’s archives. <strong>The</strong>se<br />
have been supplemented by a complete documentary record with copies <strong>of</strong><br />
all formal Board documents and all Room Documents presented to <strong>the</strong><br />
Board at each meeting. To those have been added copies <strong>of</strong> <strong>the</strong> Secretariat’s<br />
briefing notes for <strong>the</strong> Chairman and texts <strong>of</strong> statements made by <strong>the</strong><br />
Delegates and <strong>the</strong> Secretariat when available.<br />
Occasionally <strong>the</strong>re has been a request that a brief statement by <strong>the</strong><br />
Executive Director or a Delegate be included in a “Minute Note” <strong>of</strong> <strong>the</strong><br />
meeting. This has been done on a few occasions by depositing a copy <strong>of</strong> a<br />
Minute Note in <strong>the</strong> Legal Counsel’s <strong>of</strong>ficial record file for <strong>the</strong> meeting, or<br />
more rarely by discreetly distributing a statement text by letter from <strong>the</strong><br />
Executive Director, or even less frequently by attaching it to or including it<br />
in <strong>the</strong> distributed Conclusions <strong>of</strong> <strong>the</strong> meeting. When individual statements<br />
have been included in <strong>the</strong> Conclusions, this has been associated at times<br />
with major decisions giving rise to legal obligations, such as <strong>the</strong> decisions in<br />
connection with <strong>the</strong> Agreement with Norway [See <strong>IEA</strong>/GB(75)8, Item 4,<br />
Annex II], <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> Long-Term Co-operation Programme [See<br />
<strong>IEA</strong>/GB(76)5, Item 2] and new membership, such as that <strong>of</strong> Australia [See<br />
<strong>IEA</strong>/GB(79)8, Item 2]. O<strong>the</strong>r than in cases when statements might be<br />
required for those kinds <strong>of</strong> formal reasons, <strong>the</strong> Agency has discouraged<br />
requests for fragmentary additions <strong>of</strong> “Minute Notes” or <strong>of</strong> o<strong>the</strong>r forms <strong>of</strong><br />
individual Delegate statements. If any reference was made to <strong>the</strong>m at all, it<br />
has been more common for <strong>the</strong> Board simply to “note <strong>the</strong> discussion” on a<br />
particular point, or if Delegates wished, to note that statements were made<br />
by certain Delegates (without reference to <strong>the</strong> content <strong>of</strong> <strong>the</strong> statements) or<br />
at most to note a brief summary <strong>of</strong> <strong>the</strong> statements; a recent example <strong>of</strong> <strong>the</strong><br />
latter procedure is found in a footnote to <strong>the</strong> Conclusions on <strong>the</strong> use <strong>of</strong> <strong>the</strong><br />
German language in <strong>the</strong> <strong>IEA</strong>, in which Delegates for Italy, Japan, Portugal,<br />
and Spain reserved <strong>the</strong> right to raise at a future time <strong>the</strong> question <strong>of</strong> <strong>the</strong> use<br />
<strong>of</strong> <strong>the</strong>ir respective languages in <strong>the</strong> <strong>IEA</strong> [<strong>IEA</strong>/GB(91)45, Item 3].<br />
Requested more <strong>of</strong>ten during <strong>the</strong> formative years <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong><br />
inclusion <strong>of</strong> individual Delegates’ statements or references to <strong>the</strong>m has been<br />
quite rare in more recent practice.<br />
<strong>The</strong> fundamental reason for this “sparse record” approach was not only<br />
<strong>the</strong> need to save <strong>the</strong> time and costs involved in <strong>the</strong> preparation <strong>of</strong> minutes<br />
(minute writers would have to be employed), and <strong>the</strong> dedication <strong>of</strong> meeting<br />
time to correcting a detailed record, but also <strong>the</strong> need for discretion and <strong>the</strong><br />
policy <strong>of</strong> encouraging Delegates to speak fully and freely without concerns<br />
225
about seeing <strong>the</strong>ir statements later appear verbatim in Board minutes or<br />
digested in summary records. Realization <strong>of</strong> this objective also required <strong>the</strong><br />
Agency to avoid recording or making a stenographic record <strong>of</strong> <strong>the</strong> Board’s<br />
deliberations; hence <strong>the</strong>re are no <strong>of</strong>ficial level Board meeting recordings or<br />
o<strong>the</strong>r records <strong>of</strong> that kind [For Ministerial Level meetings, see below].<br />
Conclusions have served to record <strong>the</strong> formal outcome <strong>of</strong> <strong>the</strong> meetings<br />
and to provide authoritative texts <strong>of</strong> <strong>the</strong> Governing Board’s actions, including<br />
legally binding decisions and recommendations, without reproducing <strong>the</strong><br />
statements <strong>of</strong> <strong>the</strong> individual participants. <strong>The</strong>y have always been issued as<br />
classified documents, although parts are from time to time derestricted by <strong>the</strong><br />
Board. <strong>The</strong>y have met in <strong>the</strong> simplest and most efficient way possible <strong>the</strong><br />
essential requirements for meeting records mentioned above, and have proven<br />
sufficient and satisfactory to Delegates and <strong>the</strong> Secretariat over <strong>the</strong> years.<br />
Immediately after each meeting, Conclusions have been prepared by<br />
<strong>the</strong> Secretariat for prompt distribution to all Delegations for <strong>the</strong>ir review<br />
and use. <strong>The</strong>re has been no formalized Conclusion review process. Very<br />
rarely, perhaps once every few years in recent times, a Delegate has raised a<br />
question about <strong>the</strong> Conclusions or has presented a modification proposal.<br />
In such cases it has been <strong>the</strong> practice for <strong>the</strong> Delegate to communicate <strong>the</strong><br />
question or proposal to <strong>the</strong> Secretariat orally or in writing. When <strong>the</strong><br />
Secretariat agreed that <strong>the</strong> Conclusions should be modified, it prepared and<br />
circulated <strong>the</strong> new text to all Delegations, in <strong>the</strong> form <strong>of</strong> a corrigendum or<br />
revision, or in some cases awaited <strong>the</strong> next meeting <strong>of</strong> <strong>the</strong> Board to have<br />
corrective action taken. If no questions or proposals were presented during<br />
<strong>the</strong> period before <strong>the</strong> next meeting <strong>of</strong> <strong>the</strong> Board at <strong>of</strong>ficial level and if none<br />
appeared during that meeting, <strong>the</strong>n <strong>the</strong> Agency has taken <strong>the</strong> Conclusions<br />
as being definitively agreed as written and distributed without modification.<br />
Any delegate has been free to raise any particular point concerning <strong>the</strong><br />
Conclusions at any time, ei<strong>the</strong>r with <strong>the</strong> Secretariat or directly in <strong>the</strong><br />
Governing Board, but this has been quite rare. Since 1980 <strong>the</strong>re have been<br />
only three corrigenda required, only one since 1987.<br />
At an early meeting <strong>of</strong> <strong>the</strong> Governing Board it was understood that <strong>the</strong><br />
Board did not wish to have on <strong>the</strong> agenda <strong>of</strong> each meeting an item specifically<br />
calling for <strong>the</strong> review and approval <strong>of</strong> <strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong> previous<br />
meeting. <strong>The</strong> Chairman indicated that <strong>the</strong> meetings should not be burdened<br />
with that process which had sometimes consumed undue amounts <strong>of</strong> time in<br />
meetings <strong>of</strong> o<strong>the</strong>r bodies elsewhere. Particularly in <strong>the</strong> <strong>IEA</strong> Governing Board<br />
where governments were frequently represented by high <strong>of</strong>ficials from<br />
capitals, a Conclusions approval procedure in <strong>the</strong> meetings would not<br />
represent <strong>the</strong> best use <strong>of</strong> those Delegates’ time. It was considered that an over<br />
226
abundance <strong>of</strong> such formal procedural and non-substantive matters in <strong>the</strong><br />
Board might well provide a major disincentive for <strong>the</strong> attendance <strong>of</strong> those<br />
high <strong>of</strong>ficials whose direct and full participation was essential to <strong>the</strong><br />
operational success <strong>of</strong> <strong>the</strong> Agency. Hence Governing Board agendas have<br />
never contained such an item, and virtually no Board time has been lost in<br />
redrafting or disputing <strong>the</strong> texts <strong>of</strong> past Conclusions.<br />
In many cases <strong>the</strong> Secretariat includes draft Conclusions in <strong>the</strong> meeting<br />
documents, providing in that way for Delegations to see <strong>the</strong> drafts in advance.<br />
For <strong>the</strong> most sensitive and at times difficult agenda items, it was <strong>of</strong>ten<br />
impossible or unproductive for <strong>the</strong> Secretariat to seek to foresee <strong>the</strong> outcome<br />
before <strong>the</strong> Board deliberated, and no draft Conclusions were <strong>of</strong>fered. <strong>The</strong><br />
Board has also at times arranged for <strong>the</strong> preparation <strong>of</strong> draft Conclusions in<br />
<strong>the</strong> course <strong>of</strong> <strong>the</strong> meeting itself, for consideration by <strong>the</strong> Board and agreement<br />
before <strong>the</strong> end <strong>of</strong> <strong>the</strong> meeting. In view <strong>of</strong> <strong>the</strong> Board’s confidence in <strong>the</strong><br />
Secretariat, however, even this safeguard procedure was seldom used, and<br />
<strong>the</strong>n usually in <strong>the</strong> interest <strong>of</strong> speedy action when <strong>the</strong> Conclusion might<br />
immediately be made public or be used as a basis for action or public<br />
statements, as was <strong>the</strong> case for <strong>the</strong> Board’s Conclusions on <strong>the</strong> 1990-1991<br />
Gulf Crisis [See for example, <strong>IEA</strong>/GB(91)1, Item 3(c) and Annex].<br />
In <strong>the</strong> early years <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong>re were a few instances when<br />
questions were raised about <strong>the</strong> meeting Conclusions. On several occasions<br />
when numerous or far-reaching changes were being considered, <strong>the</strong> Board<br />
requested <strong>the</strong> Secretariat to present redrafted Conclusions to <strong>the</strong> next<br />
meeting <strong>of</strong> <strong>the</strong> Board, and amending decisions were made accordingly. This<br />
occurred in <strong>the</strong> second and third meetings <strong>of</strong> <strong>the</strong> Board in <strong>1974</strong> and early<br />
1975; and in its third meeting, <strong>the</strong> Board delegated Conclusions agreement<br />
powers for that meeting to <strong>the</strong> Standing Groups and thus avoided<br />
dedicating more Board time to that subject. Indeed, <strong>the</strong> Board itself did not<br />
turn to it again [See <strong>IEA</strong>/GB(75)8, Item 2; <strong>IEA</strong>/GB(74)11(1st Revision),<br />
Cover Note].<br />
(b) Ministerial Level Meetings<br />
For Ministerial Level meetings <strong>the</strong> record procedures have been more comprehensive,<br />
yet changing over <strong>the</strong> years. <strong>The</strong> Ministerial Level meetings have been<br />
electronically recorded by OECD services in <strong>the</strong> same way as <strong>the</strong> OECD<br />
Ministerial meetings are recorded. Copies <strong>of</strong> <strong>the</strong> Ministers’ complete statements<br />
were usually made available to Delegations and <strong>the</strong> Secretariat ei<strong>the</strong>r during or<br />
shortly after <strong>the</strong> meeting. Any statements which were not made available in<br />
that fashion were collected by <strong>the</strong> Secretariat directly from <strong>the</strong> Delegations<br />
concerned in order to make a complete record, whenever possible.<br />
227
Following each <strong>of</strong> <strong>the</strong> first two Ministerial Level meetings, <strong>the</strong> Secretariat<br />
prepared and distributed a comprehensive Record containing summaries or <strong>the</strong><br />
full texts <strong>of</strong> statements. For <strong>the</strong> first Ministerial held on 27 May 1975,<br />
Conclusions were integrated into <strong>the</strong> Record [<strong>IEA</strong>/GB(75)37] and issued as a<br />
separate document as well [<strong>IEA</strong>/GB(75)36]. <strong>The</strong>y were later adopted as<br />
modified by <strong>the</strong> Governing Board at <strong>of</strong>ficial level [See <strong>IEA</strong>/GB(75)69, Item 6].<br />
A parallel procedure was adopted for <strong>the</strong> second Ministerial meeting held on<br />
5-6 October 1977 [<strong>The</strong> Record for that meeting is set forth in<br />
<strong>IEA</strong>/GB(77)50(1st Revision) and <strong>the</strong> Conclusions as adopted by <strong>the</strong> Board at<br />
<strong>of</strong>ficial level appear in <strong>IEA</strong>/GB(77)52(1st Revision); see <strong>IEA</strong>/GB(78)5, Item<br />
2]. <strong>The</strong> practice <strong>of</strong> preparing formal full records <strong>of</strong> <strong>the</strong> Ministerial meetings<br />
was found to be unnecessary in view <strong>of</strong> <strong>the</strong> availability <strong>of</strong> <strong>the</strong> Communiqués<br />
and Conclusions, and was accordingly not followed <strong>the</strong>reafter.<br />
<strong>The</strong> main outcome <strong>of</strong> each Ministerial meeting has been <strong>the</strong><br />
Communiqué. It has always been seen by Ministers and was subject to<br />
amendment by <strong>the</strong>m before <strong>the</strong> close <strong>of</strong> <strong>the</strong> meeting. Sometimes <strong>the</strong><br />
Ministers have wished to have ra<strong>the</strong>r elaborate Conclusions prepared in<br />
parallel with <strong>the</strong> Communiqué, and <strong>the</strong>se have also been submitted to<br />
Ministers for amendment or approval in <strong>the</strong> same way. For Ministerial<br />
Conclusions in recent years, <strong>the</strong> more common procedure has been for <strong>the</strong><br />
Secretariat, after <strong>the</strong> meeting, to prepare brief formal Conclusions recording<br />
<strong>the</strong> adoption <strong>of</strong> <strong>the</strong> Communiqué and <strong>the</strong> instructions <strong>of</strong> Ministers on<br />
actions to implement <strong>the</strong> decisions contained in <strong>the</strong> Communiqué [See <strong>the</strong><br />
1993 Ministerial Conclusions, for example, <strong>IEA</strong>/GB(93)43, Item 3].<br />
Each <strong>of</strong> <strong>the</strong> Communiqués has been derestricted and distributed<br />
immediately after <strong>the</strong> meeting to <strong>the</strong> press and public. <strong>The</strong> Conclusions <strong>of</strong><br />
Ministerial meetings, like <strong>the</strong> Conclusions <strong>of</strong> o<strong>the</strong>r Board meetings, have been<br />
classified and are not made available to <strong>the</strong> press and public. Once issued,<br />
<strong>the</strong> Ministerial Conclusions are distributed to Delegations in <strong>the</strong> normal way.<br />
<strong>20</strong>. Management Committee<br />
As originally established in <strong>the</strong> I.E.P. Agreement, <strong>the</strong> Governing Board was<br />
expected to meet at Ministerial Level for <strong>the</strong> conduct <strong>of</strong> major <strong>IEA</strong> business<br />
[Article 50], and <strong>the</strong> Management Committee would be composed <strong>of</strong> “senior<br />
representatives” <strong>of</strong> governments [Article 53.1] to carry out “<strong>the</strong> functions<br />
assigned to it in this Agreement and any o<strong>the</strong>r function delegated to it by <strong>the</strong><br />
Governing Board” [Article 53.2]. <strong>The</strong> Management Committee was to<br />
function principally to prepare business for <strong>the</strong> Ministerial Board, to act as a<br />
senior intermediary body between <strong>the</strong> technical Standing Groups and <strong>the</strong><br />
228
Ministerial Level Governing Board and to carry out a number <strong>of</strong> tasks in<br />
accordance with <strong>the</strong> Agreement or by delegation from <strong>the</strong> Board. <strong>The</strong><br />
Committee was also empowered to “examine and make proposals to <strong>the</strong><br />
Governing Board, as appropriate, on any matter within <strong>the</strong> scope <strong>of</strong> this<br />
Agreement” [Article 53.3], to be convened upon <strong>the</strong> request <strong>of</strong> any Member<br />
[Article 53.4], to elect its Chairman and Vice-Chairmen [Article 52.5] and to<br />
elect <strong>the</strong> Chairmen and Vice-Chairmen <strong>of</strong> <strong>the</strong> Standing Groups [Article 54.2].<br />
<strong>The</strong> most specific role <strong>of</strong> <strong>the</strong> Management Committee as provided in<br />
<strong>the</strong> Agreement was to receive reports from <strong>the</strong> Standing Groups and to<br />
make proposals to <strong>the</strong> Governing Board on subjects specified in <strong>the</strong><br />
Agreement. Those subjects include <strong>the</strong> following:<br />
Article 4.2:<br />
Article 5.3:<br />
Article 6.3:<br />
Article 11:<br />
Article 18.2:<br />
Article 19.2:<br />
Article <strong>20</strong>.2:<br />
Article 21.3:<br />
Article 23.2:<br />
Articles 29.2<br />
and 31.2:<br />
Articles 34.2<br />
and 36:<br />
Article 37.3:<br />
Article 43.1:<br />
Article 48.2:<br />
Articles 55-58:<br />
Annex:<br />
Effectiveness <strong>of</strong> Members’ emergency reserve<br />
measures<br />
Members’ demand restraint programs and measures<br />
Members’ allocation measures<br />
Historical oil trade patterns<br />
Base period final consumption<br />
Activation and <strong>the</strong> finding<br />
Measures to meet <strong>the</strong> necessities <strong>of</strong> <strong>the</strong> situation<br />
Member’s request for a finding<br />
Deactivation<br />
General information section<br />
Special information section<br />
Consultations with oil companies<br />
Long-term co-operation<br />
Relations with producers and o<strong>the</strong>r consumers<br />
Reports from Standing Committees<br />
Emergency reserves and o<strong>the</strong>r subjects appearing in<br />
<strong>the</strong> Annex to <strong>the</strong> I.E.P. Agreement.<br />
At <strong>the</strong> first meeting <strong>of</strong> <strong>the</strong> Governing Board, however, it became apparent<br />
that <strong>the</strong> business <strong>of</strong> <strong>the</strong> Agency would require more constant high level<br />
attention than Ministers might be expected to give, and that <strong>the</strong> Governing<br />
Board would have to meet regularly at senior <strong>of</strong>ficial ra<strong>the</strong>r than Ministerial<br />
Level for most <strong>of</strong> its work. Indeed <strong>the</strong> Board’s first meeting, on<br />
18 November <strong>1974</strong>, was held at <strong>of</strong>ficial ra<strong>the</strong>r than Ministerial Level, and<br />
<strong>the</strong> first Ministerial meeting did not take place until May 1975 [See Section<br />
229
A-5 above]. Since <strong>the</strong> meeting system as originally envisaged could not be<br />
expected to work satisfactorily, immediately at its first meeting <strong>the</strong><br />
Governing Board had to find a new meeting arrangement. On that<br />
occasion, <strong>the</strong> Governing Board [<strong>IEA</strong>/GB(74)9(1st Revision) Preliminary<br />
Matters]:<br />
(a) agreed that until fur<strong>the</strong>r decision its meetings would be<br />
deemed to be joint meetings <strong>of</strong> <strong>the</strong> Governing Board and<br />
<strong>the</strong> Management Committee <strong>of</strong> <strong>the</strong> Agency.<br />
This solution satisfied <strong>the</strong> I.E.P. Agreement requirement <strong>of</strong> consideration in<br />
<strong>the</strong> Management Committee as well as in <strong>the</strong> Governing Board <strong>of</strong> many <strong>of</strong><br />
<strong>the</strong> issues listed above. It also permitted <strong>the</strong> Board to function regularly and<br />
effectively at <strong>of</strong>ficial level with Delegates <strong>of</strong> Ministers, reserving Ministerial<br />
Level meetings to special occasions. <strong>The</strong>reafter, each <strong>of</strong> <strong>the</strong> Board meetings<br />
except Ministerial Level meetings, has been convened as a joint meeting <strong>of</strong><br />
<strong>the</strong> Governing Board and <strong>the</strong> Management Committee. <strong>The</strong> Management<br />
Committee itself has never been convened separately.<br />
B. <strong>The</strong> Standing Groups<br />
1. Function and Competence<br />
Article 49.1 <strong>of</strong> <strong>the</strong> I.E.P Agreement provides that <strong>the</strong> Agency shall have <strong>the</strong><br />
following “organs”: a Governing Board, a Management Committee and<br />
Standing Groups on: Emergency Questions (SEQ), <strong>the</strong> Oil Market (SOM),<br />
Long Term Co-operation (SLT) and Relations with Producer and o<strong>the</strong>r<br />
Consumer Countries (SPC). Although <strong>the</strong> Governing Board may establish<br />
o<strong>the</strong>r organs necessary for <strong>the</strong> implementation <strong>of</strong> <strong>the</strong> Program [Article<br />
49.2], and has done so [See Section C below], additional Standing Groups<br />
as such have not been established. Since <strong>the</strong> four Standing Groups were<br />
created by <strong>the</strong> I.E.P. Agreement and not by <strong>the</strong> Governing Board, <strong>the</strong><br />
Standing Groups enjoy “treaty status” and a mandate provided broadly in<br />
<strong>the</strong> Agreement ra<strong>the</strong>r than by <strong>the</strong> Governing Board. Those organs and <strong>the</strong><br />
o<strong>the</strong>rs specified in Article 49.1 were also integrated into <strong>the</strong> Agency’s<br />
internal system by means <strong>of</strong> <strong>the</strong> Board’s <strong>1974</strong> Decision on <strong>the</strong> Program [See<br />
Chapter II, Section C-7 above] which provides in paragraph 2 that:<br />
<strong>The</strong> organs provided for in <strong>the</strong> Program are hereby established<br />
as organs <strong>of</strong> <strong>the</strong> Agency; <strong>the</strong>y shall carry out <strong>the</strong>ir responsi-<br />
230
ilities in accordance with <strong>the</strong> procedures set out in <strong>the</strong> Program<br />
and shall take decisions, recommendations and o<strong>the</strong>r actions as<br />
provided <strong>the</strong>rein.<br />
<strong>The</strong> function <strong>of</strong> <strong>the</strong> Standing Groups has been essentially to carry out <strong>the</strong><br />
mandates given to <strong>the</strong>m respectively in <strong>the</strong> I.E.P. Agreement and Governing<br />
Board decisions, as discussed below, but more broadly speaking <strong>the</strong> principal<br />
function <strong>of</strong> <strong>the</strong> Groups has been to prepare reports and make proposals to<br />
<strong>the</strong> Governing Board, <strong>the</strong> action organ <strong>of</strong> <strong>the</strong> Agency. Decisions,<br />
recommendations and o<strong>the</strong>r actions have been almost always taken by <strong>the</strong><br />
Governing Board ra<strong>the</strong>r than <strong>the</strong> Standing Groups, although some delegation<br />
<strong>of</strong> powers has been made to <strong>the</strong>m from time to time. Since <strong>the</strong> Board has<br />
been composed principally <strong>of</strong> high <strong>of</strong>ficials (or Ministers) with political or<br />
broad technical responsibilities, <strong>the</strong>re was need for expert level preparation in<br />
<strong>the</strong> Standing Groups for Governing Board actions. In <strong>the</strong> Standing Groups<br />
that preparation has consisted usually <strong>of</strong> initiating proposals, researching,<br />
studying, debating, refining and drafting <strong>the</strong>m into Governing Board<br />
formulations with preliminary political as well as technical expertise.<br />
Consensus building for proposals has been also an important Standing Group<br />
function, since a well prepared and politically sound body <strong>of</strong> proposals<br />
carrying general acceptance at <strong>the</strong> Standing Group level has been best<br />
situated for achieving Governing Board acceptance in <strong>the</strong> final stages <strong>of</strong> <strong>the</strong><br />
<strong>IEA</strong> decision process. In all <strong>of</strong> this work, it will be recalled that <strong>the</strong> Standing<br />
Groups have been regularly assisted by <strong>the</strong> Secretariat <strong>of</strong> <strong>the</strong> Agency [See<br />
Chapter VI below], and indeed <strong>the</strong> provision <strong>of</strong> such assistance is one <strong>of</strong> <strong>the</strong><br />
principal functions <strong>of</strong> <strong>the</strong> Secretariat [See I.E.P. Agreement Article 49.3].<br />
Delegation <strong>of</strong> power <strong>of</strong> decision or o<strong>the</strong>r decisive action to <strong>the</strong><br />
Standing Groups is foreseen in <strong>the</strong> I.E.P Agreement Article 51.3: “<strong>The</strong><br />
Governing Board, acting by majority, may delegate any <strong>of</strong> its functions to<br />
any o<strong>the</strong>r organ <strong>of</strong> <strong>the</strong> Agency”, but actual delegation <strong>of</strong> powers to <strong>the</strong><br />
Standing Groups or <strong>the</strong>ir sub-Groups or to <strong>the</strong> Committees is uncommon in<br />
<strong>IEA</strong> practice. Two outstanding examples <strong>of</strong> delegation are (1) in 1976, <strong>the</strong><br />
delegation <strong>of</strong> power <strong>of</strong> decision on Type 3 actions under <strong>the</strong> Emergency<br />
Sharing System to <strong>the</strong> SEQ Emergency Group, a Sub-Group <strong>of</strong> <strong>the</strong> Standing<br />
Group on Emergency Questions (SEQ); and (2) in May 1992 <strong>the</strong> partial<br />
delegation <strong>of</strong> authority on certain non-Member relations questions to <strong>the</strong><br />
Standing Groups and deferral <strong>of</strong> action on possible additional delegations <strong>of</strong><br />
power to <strong>the</strong> Committee on Non-Member Countries.<br />
<strong>The</strong> SEQ Emergency Group power delegation appears in <strong>the</strong> Emergency<br />
Management Manual (EMM) 4th Ed. 1982 p. 32, in connection with<br />
231
<strong>the</strong> emergency allocation <strong>of</strong> oil. In advanced stages <strong>of</strong> Agency response<br />
under <strong>the</strong> Emergency Sharing System (ESS), actions in addition to <strong>the</strong><br />
voluntary co-operation <strong>of</strong> participating oil companies might become<br />
necessary to meet countries’ supply rights under <strong>the</strong> System. <strong>The</strong> additional<br />
actions are called “Type 3” in ESS terminology and include “direct instructions<br />
from governments to Reporting Companies,” [as described in EMM<br />
Section C.III. 5, Step 9, p. 32]. Under Step 9, where <strong>the</strong> SEQ Emergency<br />
Group (SEQ-EG) considers such mandatory action by companies to be<br />
necessary, that Group makes <strong>the</strong> decision which creates <strong>the</strong> obligation <strong>of</strong> <strong>the</strong><br />
competent Member governments to issue <strong>the</strong> appropriate company<br />
instructions. Although <strong>the</strong>se are among <strong>the</strong> most far-reaching and innovative<br />
categories <strong>of</strong> decisions which <strong>the</strong> Agency can make, no Governing Board<br />
intervention in <strong>the</strong> process is specifically foreseen, and <strong>the</strong> SEQ-EG’s<br />
decisions by delegation are final and binding on <strong>the</strong> Members concerned.<br />
In <strong>the</strong> May 1992 general consideration <strong>of</strong> <strong>the</strong> participation <strong>of</strong> Non-<br />
Member countries (NMCs) in <strong>the</strong> activities <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong> Governing<br />
Board reserved general control over policy guidance and decisions, and<br />
specifically reserved power to decide on <strong>the</strong> participation by new non-<br />
Member countries, but made an important delegation <strong>of</strong> power to <strong>the</strong><br />
Standing Groups as follows:<br />
For an experimental period, <strong>the</strong> Standing Groups should decide<br />
on <strong>the</strong> level, frequency, and subjects for NMC participation,<br />
subject to <strong>the</strong> right <strong>of</strong> any Member country to refer such a<br />
decision to <strong>the</strong> Governing Board.<br />
<strong>The</strong>se decisions were contained in <strong>IEA</strong>/GB(92)25, Item 5(b) and referred to<br />
<strong>the</strong> proposals made in <strong>IEA</strong>/GB(92)18/FINAL p. 4. <strong>The</strong> delegation <strong>of</strong><br />
authority was narrowly framed, was subject to a specific Governing Board<br />
override, and was accompanied by a decision to defer consideration <strong>of</strong> a still<br />
fur<strong>the</strong>r expansion <strong>of</strong> <strong>the</strong> power <strong>of</strong> <strong>the</strong> NMC, thus reflecting a continuing<br />
policy <strong>of</strong> caution by <strong>the</strong> Board in making significant delegations <strong>of</strong> powers<br />
to <strong>the</strong> Standing Groups and Committees <strong>of</strong> <strong>the</strong> Agency [For delegation <strong>of</strong><br />
power to <strong>the</strong> Committee, see Section C-1 below].<br />
<strong>The</strong> formal competence <strong>of</strong> <strong>the</strong> Standing Groups appears in three<br />
different types <strong>of</strong> formulations, two in <strong>the</strong> I.E.P. Agreement text, and <strong>the</strong><br />
third in decisions <strong>of</strong> <strong>the</strong> Governing Board. <strong>The</strong> basic grants <strong>of</strong> competence<br />
are contained in Chapter IX <strong>of</strong> <strong>the</strong> Agreement, largely in parallel fashion for<br />
each <strong>of</strong> <strong>the</strong> Groups. Thus Articles 55, 56, 57 and 58 provide that <strong>the</strong> SEQ,<br />
<strong>the</strong> SOM, <strong>the</strong> SLT and <strong>the</strong> SPC shall respectively:<br />
232
■<br />
■<br />
■<br />
■<br />
Carry out <strong>the</strong> functions assigned to <strong>the</strong>m in <strong>the</strong> applicable Chapters <strong>of</strong> <strong>the</strong><br />
Agreement [Chapters I-V and <strong>the</strong> Annex for <strong>the</strong> SEQ, Chapters V and VI<br />
for <strong>the</strong> SOM, Chapter VII for <strong>the</strong> SLT and Chapter VIII for <strong>the</strong> SPC].<br />
Carry out any o<strong>the</strong>r functions delegated to <strong>the</strong>m by <strong>the</strong> Governing<br />
Board.<br />
Review and report to <strong>the</strong> Management Committee (in practice to <strong>the</strong><br />
Governing Board) on any matter within <strong>the</strong> scope <strong>of</strong> <strong>the</strong> applicable<br />
Chapters.<br />
Consult with oil companies on any matter within its competence (for<br />
<strong>the</strong> SEQ, <strong>the</strong> SOM and <strong>the</strong> SPC).<br />
Quite numerous and far-reaching functions are specifically assigned to <strong>the</strong><br />
various Groups under <strong>the</strong> Agreement Chapters referred to in <strong>the</strong> preceding<br />
paragraph. Some <strong>of</strong> <strong>the</strong> most significant <strong>of</strong> <strong>the</strong>se functions can be<br />
mentioned in passing, however. Thus, <strong>the</strong> SEQ regularly reviews and<br />
reports on Members’ emergency oil stock measures and related questions<br />
[Article 4 and Annex], on demand restraint programmes and measures<br />
[Article 5], on allocation measures [Article 6], on computation elements<br />
such as <strong>the</strong> “base period” [Article 18] and on <strong>the</strong> Special (Emergency)<br />
Section <strong>of</strong> <strong>the</strong> Oil Information System [Articles 34-36]. <strong>The</strong> SOM reports<br />
on <strong>the</strong> various elements <strong>of</strong> <strong>the</strong> General Section <strong>of</strong> <strong>the</strong> Oil Information<br />
System [Articles 29-31] and <strong>of</strong> <strong>the</strong> Framework for Consultations with Oil<br />
Companies [Articles 37-40]. <strong>The</strong> SLT was given a broad mandate in<br />
Chapter VII to examine and report on “co-operative action” in <strong>the</strong> Long-<br />
Term energy field [Article 42] and it did that comprehensively by<br />
developing and presenting <strong>the</strong> Long-Term Co-operation Programme, which<br />
itself contains additional standing mandates <strong>of</strong> <strong>the</strong> SLT. Finally, <strong>the</strong><br />
Producer-Consumer Group was given a mandate to examine and report on<br />
<strong>the</strong> broad range <strong>of</strong> matters described in Chapter VIII on that subject,<br />
matters which are now within <strong>the</strong> general competence <strong>of</strong> <strong>the</strong> Committee on<br />
Non-Member Countries. <strong>The</strong> broad mandates have always been considered<br />
to cover <strong>the</strong> entire scope <strong>of</strong> <strong>the</strong> sector assigned to each Standing Group and<br />
to include <strong>the</strong> important function <strong>of</strong> making action proposals. Discussions<br />
about <strong>the</strong> substantive scope <strong>of</strong> <strong>the</strong> competence <strong>of</strong> <strong>the</strong> Groups are not known<br />
to have arisen <strong>of</strong>ten or to have presented problems for <strong>the</strong> Standing Groups<br />
in carrying out <strong>the</strong>ir tasks.<br />
As noted above, <strong>the</strong>re were a number <strong>of</strong> specific Governing Board<br />
instructions and requests to each <strong>of</strong> <strong>the</strong> Groups for specific tasks to be<br />
carried out. <strong>The</strong>se instructions and requests, foreseen and authorized by<br />
Articles 55-58, have appeared frequently in <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency,<br />
233
sometimes in more or less standing order form, at o<strong>the</strong>r times on an ad hoc<br />
basis for particular work to be done. <strong>The</strong> various standing mandates tend to<br />
be collected in <strong>the</strong> OECD “Bodies <strong>of</strong> <strong>the</strong> Organisation”, a document<br />
produced annually to disseminate information about current mandates,<br />
membership and <strong>of</strong>ficers.<br />
<strong>The</strong> ad hoc type mandates have been more frequent, to <strong>the</strong> extent<br />
that each Governing Board meeting might well be expected to adopt one or<br />
more instructions or requests to Standing Groups for particular work to be<br />
reported to <strong>the</strong> next or later meetings <strong>of</strong> <strong>the</strong> Board. Much <strong>of</strong> <strong>the</strong> current<br />
work <strong>of</strong> <strong>the</strong> Standing Groups as well as <strong>the</strong> Committees has been mandated<br />
in that fashion.<br />
2. Procedures<br />
Although <strong>the</strong> Standing Groups’ general rule on procedures is to follow <strong>the</strong><br />
parallel rules <strong>of</strong> <strong>the</strong> Governing Board in most cases, some procedural aspects<br />
<strong>of</strong> <strong>the</strong> Standing Groups should be mentioned. Under Article 50.2 <strong>the</strong> Board<br />
was empowered to adopt its own rules <strong>of</strong> procedure, but has elected not to do<br />
so in a systematic fashion. In referring to rules <strong>of</strong> procedure adopted by <strong>the</strong><br />
Board, Article 50.2 states that “<strong>the</strong>se rules shall also apply to <strong>the</strong> . . . Standing<br />
Groups”. Hence <strong>the</strong> Standing Groups are to follow procedures appearing in<br />
<strong>the</strong> Agreement and decisions <strong>of</strong> <strong>the</strong> Governing Board for itself (applicable by<br />
analogy as appropriate) or directed specifically to <strong>the</strong> Standing Groups,<br />
although decisions <strong>of</strong> that kind are rarely adopted. One noteworthy example<br />
<strong>of</strong> this procedure occurred at its first meeting when <strong>the</strong> Board decided that <strong>the</strong><br />
Standing Group Chairmen “would organise <strong>the</strong>ir Standing Group meetings in<br />
a flexible fashion and might meet as required in capitals” [<strong>IEA</strong>/GB(74)9(1st<br />
Revision), Item 8(b)]. In 1992 <strong>the</strong> Governing Board adopted Guidelines for<br />
<strong>the</strong> participation <strong>of</strong> non-Member countries (NMCs) in <strong>IEA</strong> meetings, and for<br />
<strong>the</strong> Standing Groups decided that:<br />
For an experimental period, <strong>the</strong> Standing Groups should decide<br />
on <strong>the</strong> level, frequency, and subjects <strong>of</strong> NMC participation,<br />
subject to <strong>the</strong> right <strong>of</strong> any Member country to refer such a<br />
decision to <strong>the</strong> Governing Board. However, participation by a<br />
new non-Member country would be a matter for Governing<br />
Board consideration. <strong>The</strong> NMC Committee should be regularly<br />
informed. Participation by NMCs in <strong>IEA</strong> meetings should<br />
be ad hoc and informal [<strong>IEA</strong>/GB(92)25, Item 5(b); <strong>IEA</strong>/<br />
GB(92)18/FINAL, Part III A].<br />
234
Aside from <strong>the</strong> above considerations, however, <strong>the</strong> Groups have remained<br />
free to organize <strong>the</strong>ir work as <strong>the</strong>y find necessary or convenient.<br />
<strong>The</strong> composition <strong>of</strong> each Standing Group is to be “one or more<br />
representatives <strong>of</strong> <strong>the</strong> Government <strong>of</strong> each Participating Country” [Article<br />
54.1]. In practice this representation is assured ei<strong>the</strong>r by <strong>of</strong>ficials from<br />
Members’ capitals or by members <strong>of</strong> <strong>the</strong> country’s OECD Delegation; <strong>the</strong>re<br />
has been a greater tendency for members <strong>of</strong> Delegations to act in <strong>the</strong><br />
Standing Groups than in <strong>the</strong> Governing Board. <strong>The</strong> Chairmen have been<br />
selected usually from among <strong>of</strong>ficials based in capitals, <strong>of</strong>ten from among<br />
<strong>the</strong> Members’ Governing Board representatives; this has added weight to <strong>the</strong><br />
deliberations <strong>of</strong> <strong>the</strong> Groups and has ensured strong representation <strong>of</strong> <strong>the</strong><br />
Standing Groups in <strong>the</strong> Governing Board when it considered and acted<br />
upon reports and recommendations from <strong>the</strong>m. <strong>The</strong> Chairman and Vice-<br />
Chairmen have been elected under <strong>the</strong> Management Committee’s powers,<br />
but in practice by <strong>the</strong> Governing Board, as individuals and not as countries,<br />
usually with an eye to <strong>the</strong> individuals’ experience, to <strong>the</strong> respect accorded to<br />
<strong>the</strong>m by Members, and to geographical distribution in a broad and flexible<br />
fashion. Under Article 54.2 <strong>of</strong> <strong>the</strong> I.E.P. Agreement, those elections have<br />
been made by “majority” in formal terms, but by consensus in practice.<br />
In <strong>the</strong> conduct <strong>of</strong> meeting deliberations and decisions, <strong>the</strong> Standing<br />
Groups follow <strong>the</strong> Governing Board’s practices, whe<strong>the</strong>r contained in formal<br />
rules or not. This applies to voting and consensus as well as to o<strong>the</strong>r<br />
procedural questions. Like <strong>the</strong> Board, <strong>the</strong> Groups have acted usually by<br />
consensus. <strong>The</strong>re has not been a recorded or formal vote <strong>of</strong> a Standing<br />
Group in memory; but <strong>the</strong>re have been divided views, reservations or<br />
objections which could be made known to <strong>the</strong> Governing Board when<br />
considering a report or o<strong>the</strong>r communication from a Standing Group.<br />
When <strong>the</strong>re have been questions which might be decided by a Standing<br />
Group vote, <strong>the</strong> voting rule would be <strong>the</strong> same as for <strong>the</strong> Governing Board,<br />
that is majority as provided in Articles 61 and 62 <strong>of</strong> <strong>the</strong> I.E.P. Agreement on<br />
procedural and management questions, and unanimity on new<br />
commitments <strong>of</strong> Members, but questions <strong>of</strong> this kind are not known to have<br />
arisen in any <strong>of</strong> <strong>the</strong> Standing Groups.<br />
<strong>The</strong> types <strong>of</strong> actions to be taken by <strong>the</strong> Standing Groups depend upon<br />
<strong>the</strong> applicable mandate. Normally <strong>the</strong> Groups make reports, recommendations<br />
or proposals or simply inform <strong>the</strong> Board on <strong>the</strong> subject <strong>of</strong> reports, but<br />
in cases <strong>of</strong> delegation <strong>of</strong> powers <strong>the</strong> actions could take <strong>the</strong> form <strong>of</strong> binding<br />
decisions [as in <strong>the</strong> case <strong>of</strong> <strong>the</strong> SEQ-Emergency Group adopting binding<br />
Type 3 decisions, described in Section B-1 above]. When competence has<br />
been delegated by <strong>the</strong> Governing Board, a Group can take any decision<br />
235
which <strong>the</strong> Governing Board was entitled to make itself pursuant to <strong>the</strong> I.E.P.<br />
Agreement [See Article 51.3]. <strong>The</strong> nature and form <strong>of</strong> <strong>the</strong> Standing<br />
Group’s action can thus be controlled by <strong>the</strong> Governing Board, or within <strong>the</strong><br />
Board’s own limits, it can be left to <strong>the</strong> Standing Group to determine.<br />
Sub-Groups may be created by <strong>the</strong> Standing Groups to assist in <strong>the</strong>ir<br />
work. At its first meeting <strong>the</strong> Governing Board specifically authorized <strong>the</strong><br />
Standing Groups to “set up working parties composed, as a general rule, <strong>of</strong><br />
interested members” [<strong>IEA</strong>/GB(74)9(1st Revision), Item 8(b)]. <strong>The</strong> latter<br />
procedure has been employed for each <strong>of</strong> <strong>the</strong> three currently established<br />
Sub-Groups. <strong>The</strong> SLT created <strong>the</strong> three Sub-Groups which exist at <strong>the</strong> time<br />
<strong>of</strong> this writing, that is, <strong>the</strong> Sub-Group on Accelerated Development <strong>of</strong><br />
Alternative Energy Sources (inactive), <strong>the</strong> Sub-Group on Conservation, and<br />
<strong>the</strong> Nuclear Sub-Group (inactive), each <strong>of</strong> which acts pursuant to <strong>the</strong><br />
specific mandate adopted by <strong>the</strong> SLT [<strong>The</strong> current mandates are found in<br />
<strong>the</strong> OECD “Bodies <strong>of</strong> <strong>the</strong> Organisation” document]. <strong>The</strong> Nuclear Sub-<br />
Group displaced <strong>the</strong> former Sub-Group on Enriched Uranium Supply and<br />
<strong>the</strong> Ad Hoc Group on Emergency Sharing <strong>of</strong> Natural and Enriched<br />
Uranium and Uranium Services. Energy Research and Development work<br />
in <strong>the</strong> <strong>IEA</strong> was initially carried out in <strong>the</strong> SLT Sub-Group on Research and<br />
Development until <strong>the</strong> Governing Board created a Board Committee for that<br />
purpose, <strong>the</strong> Committee now known as <strong>the</strong> Committee on Energy Research<br />
and Technology (CERT). <strong>The</strong> procedures for Sub-Groups have followed <strong>the</strong><br />
rules applicable to <strong>the</strong> Standing Group; <strong>the</strong> Chairman has been elected by<br />
<strong>the</strong> Standing Group, but <strong>the</strong> election could be left to <strong>the</strong> Sub-Group itself.<br />
In <strong>the</strong> case <strong>of</strong> <strong>the</strong> Nuclear Sub-Group mandate, <strong>the</strong>re is provision for <strong>the</strong><br />
Sub-Group to co-operate with <strong>the</strong> OECD Nuclear Energy Agency (NEA)<br />
and to maintain contact with o<strong>the</strong>r bodies <strong>of</strong> <strong>the</strong> Agency concerned.<br />
Over <strong>the</strong> years <strong>the</strong> Standing Groups have provided <strong>the</strong> vehicle for <strong>the</strong><br />
technical background work necessary for <strong>the</strong> Agency’s political decisions to<br />
be undertaken on a sound basis and with as much political consensus as<br />
possible. <strong>The</strong> heart <strong>of</strong> <strong>the</strong> <strong>IEA</strong> work has taken place <strong>of</strong>ten in <strong>the</strong> Standing<br />
Groups which gave indispensable support to <strong>the</strong> Governing Board and<br />
<strong>the</strong>reby contributed generally to <strong>the</strong> stature <strong>of</strong> <strong>the</strong> Agency.<br />
C. <strong>The</strong> Committees<br />
While <strong>the</strong> <strong>IEA</strong> Standing Groups discussed above were each created by <strong>the</strong><br />
I.E.P. Agreement, <strong>the</strong> Committees <strong>of</strong> <strong>the</strong> Agency have been creations <strong>of</strong> <strong>the</strong><br />
236
Governing Board, acting under Article 49.2 which provides that <strong>the</strong><br />
Governing Board “. . . may, acting by majority, establish any o<strong>the</strong>r organ<br />
necessary for <strong>the</strong> implementation <strong>of</strong> <strong>the</strong> Program”. <strong>The</strong> Committee<br />
mandates have been determined by <strong>the</strong> Governing Board which is free to<br />
adopt, modify or abolish <strong>the</strong>m at any time, while <strong>the</strong> basic mandates <strong>of</strong> <strong>the</strong><br />
Standing Groups as set forth in <strong>the</strong> Agreement could not be modified or<br />
abolished without amendment <strong>of</strong> <strong>the</strong> Agreement. This procedural<br />
distinction between <strong>the</strong> two types <strong>of</strong> <strong>IEA</strong> organs could <strong>the</strong>oretically have an<br />
effect on <strong>the</strong>ir respective status, for <strong>the</strong> Standing Groups are “treaty<br />
creations”, and <strong>the</strong> Committees are “Governing Board creations”. However,<br />
in practice no such distinction has been made, and for one organ (<strong>the</strong><br />
Committee on Non-Member Countries), <strong>the</strong> Committee has in effect<br />
displaced <strong>the</strong> Standing Group and enjoys a higher operational status in<br />
practice [See Section B-1 above]. <strong>The</strong> Committees have carried out in <strong>the</strong>ir<br />
respective sectors very much <strong>the</strong> same functions as <strong>the</strong> Standing Groups do<br />
in <strong>the</strong>irs, and <strong>the</strong>re has been little or no operational reason to distinguish<br />
between <strong>the</strong>m. Hence <strong>the</strong> distinction has been largely an historical and<br />
formal one without practical significance.<br />
1. Function and Competence<br />
<strong>The</strong> Governing Board has established three permanent and plenary<br />
Committees <strong>of</strong> <strong>the</strong> Agency: <strong>the</strong> Committee on Non-Member Countries<br />
(NMC), <strong>the</strong> Committee on Energy Research and Technology (CERT) and<br />
<strong>the</strong> Committee on Budget and Expenditure (BC). <strong>The</strong> function <strong>of</strong> <strong>the</strong><br />
Committees in <strong>the</strong>ir respective fields, which are largely separate from those<br />
<strong>of</strong> <strong>the</strong> Standing Groups, is to examine, study and report on matters which<br />
come before <strong>the</strong>m, as is <strong>the</strong> case for <strong>the</strong> Standing Groups in <strong>the</strong>ir respective<br />
fields. Each <strong>of</strong> <strong>the</strong> Committees enjoys <strong>the</strong> competence conferred upon it by<br />
<strong>the</strong> Governing Board decision establishing <strong>the</strong> Committee and by later<br />
Board actions assigning functions, giving instructions or making requests to<br />
<strong>the</strong> Committee.<br />
Under Article 51.3 <strong>of</strong> <strong>the</strong> I.E.P. Agreement, <strong>the</strong> Governing Board may<br />
delegate functions not only to <strong>the</strong> Standing Groups [See Section B-1 above],<br />
but also to <strong>the</strong> Committees. <strong>The</strong> Board has done this recently, for example, by<br />
delegation to <strong>the</strong> Committee on Energy Research and Technology (CERT). In<br />
October 1993, <strong>the</strong> Governing Board amended <strong>the</strong> “Guiding Principles for Cooperation<br />
in <strong>the</strong> Field <strong>of</strong> Energy Research and Development” to delegate to<br />
<strong>the</strong> CERT <strong>the</strong> power to approve <strong>the</strong> participation <strong>of</strong> “Sponsors” in Energy R<br />
& D collaborative project Implementing Agreements. Special rules govern <strong>the</strong><br />
237
qualification and selection <strong>of</strong> “Sponsors”; <strong>the</strong>y do not become full Contracting<br />
Parties to those Agreements, but <strong>the</strong>y participate in accordance with<br />
particular terms and conditions under <strong>IEA</strong>/GB(93)57, Item 7 and Annex I].<br />
In December 1993, <strong>the</strong> Board made a fur<strong>the</strong>r delegation <strong>of</strong> function to <strong>the</strong><br />
CERT, in agreeing that <strong>the</strong> Committee “will determine how <strong>the</strong> <strong>IEA</strong> portion <strong>of</strong><br />
a joint <strong>IEA</strong>/OECD study on energy and environmental technologies to<br />
respond to global environmental concerns should be conducted” [<strong>IEA</strong>/<br />
GB(93)65, Item 6(a)(i)].<br />
<strong>The</strong> history <strong>of</strong> <strong>IEA</strong> bodies dealing with non-Member relations is outlined<br />
in Chapter IV, Section D-2 above. <strong>The</strong> current mandate <strong>of</strong> <strong>the</strong> Committee on<br />
Non-Member Countries (NMC) is also described in that Section. Briefly stated,<br />
<strong>the</strong> Committee is <strong>the</strong> successor to <strong>the</strong> Ad Hoc Group on International Energy<br />
Relations, and its function is “to report to <strong>the</strong> Governing Board on<br />
international energy relations and to carry out such o<strong>the</strong>r functions as may be<br />
assigned to it by <strong>the</strong> Governing Board” [<strong>IEA</strong>/GB(77)33, Item 8(a)]. In 1992<br />
<strong>the</strong> Governing Board decided [<strong>IEA</strong>/GB(92)25, Item 5(d)] that:<br />
(i) <strong>the</strong> Committee on Non-Member Countries shall, taking<br />
into account <strong>the</strong> views <strong>of</strong> <strong>the</strong> Standing Groups and o<strong>the</strong>r<br />
committees <strong>of</strong> <strong>the</strong> Agency, advise <strong>the</strong> Secretariat and advise<br />
<strong>the</strong> Standing Groups and o<strong>the</strong>r committees <strong>of</strong> <strong>the</strong> Agency<br />
with regard to non-Member country activities;<br />
(ii) overall policy guidance and decisions shall continue to be<br />
<strong>the</strong> responsibility <strong>of</strong> <strong>the</strong> Governing Board.<br />
and <strong>the</strong> Committee at <strong>the</strong> same time was requested [Item 5(e)] to:<br />
(i) ensure that, on a timely and regular basis, information on<br />
<strong>the</strong> Agency’s non-Member country activities is communicated<br />
to Member countries, and Member country views<br />
are communicated to <strong>the</strong> Secretariat;<br />
(ii) report regularly to <strong>the</strong> Governing Board on <strong>the</strong> foregoing<br />
subject.<br />
At that time <strong>the</strong> Board also noted, with respect to <strong>the</strong> possibly expanded role<br />
<strong>of</strong> <strong>the</strong> Committee [See <strong>IEA</strong>/GB(92)18/FINAL, Parts IV and V], that “<strong>the</strong><br />
role <strong>of</strong> <strong>the</strong> Committee on Non-Member Countries needs to be fur<strong>the</strong>r<br />
developed over time, bearing in mind that specific areas <strong>of</strong> co-operation<br />
with non-Member countries must be integrated into <strong>the</strong> work <strong>of</strong> o<strong>the</strong>r<br />
Standing Groups”.<br />
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<strong>The</strong> second <strong>IEA</strong> Committee charged with programme activities is <strong>the</strong><br />
Committee on Energy Research and Technology (CERT). In adopting <strong>the</strong><br />
decision on <strong>the</strong> establishment <strong>of</strong> this Committee, <strong>the</strong> Governing Board<br />
explicitly expressed its desire “to establish a body <strong>of</strong> adequate status to be<br />
responsible for energy research and development” [Emphasis added; see<br />
<strong>IEA</strong>/GB(75)94, Item 7 and Annex II, Preamble]. <strong>The</strong> Committee’s terms <strong>of</strong><br />
reference, as established by <strong>the</strong> Governing Board in 1975, can be<br />
summarized as follows: to submit to <strong>the</strong> Board an energy R & D strategy<br />
and to oversee its implementation, to ensure consultation and collaboration<br />
with <strong>the</strong> SLT and close co-ordination between <strong>the</strong> R & D strategy and <strong>the</strong><br />
Long-Term Co-operation Programme, to carry out periodic reviews <strong>of</strong><br />
relevant national programmes, to identify opportunities and promote<br />
collaboration among Members, to report to <strong>the</strong> Governing Board as<br />
appropriate and at least once each year, and “to carry out such o<strong>the</strong>r<br />
functions as may from time to time be delegated to it by <strong>the</strong> Governing<br />
Board” [<strong>The</strong> relevant texts are collected annually in <strong>the</strong> OECD “Bodies <strong>of</strong><br />
<strong>the</strong> Organisation” document].<br />
While <strong>the</strong> Non-Member and CERT Committees mentioned above<br />
have broad policy functions in <strong>the</strong>ir respective sectors, quite like <strong>the</strong><br />
Standing Groups do in <strong>the</strong>irs, <strong>the</strong> Committee on Budget and Expenditure<br />
(BC) has <strong>the</strong> relatively narrow focus its name suggests. A separate budget<br />
committee for <strong>the</strong> Agency was considered at <strong>the</strong> outset to be essential to <strong>the</strong><br />
proper financial administration <strong>of</strong> <strong>the</strong> Agency and to reflect its unique<br />
operational character. A committee apart from <strong>the</strong> OECD Budget<br />
Committee was found best suited to reflect those objectives and to ensure<br />
undiluted attention to <strong>the</strong> Agency’s financial business and <strong>the</strong> special<br />
problems <strong>of</strong> dealing with operations which <strong>the</strong> Agency might be called upon<br />
to undertake, and those considerations were reflected in Article 10(a) <strong>of</strong> <strong>the</strong><br />
OECD Council Decision. At its first meeting <strong>the</strong> Governing Board<br />
[<strong>IEA</strong>/GB(74)9(1st Revision), Item 12]<br />
(a) established a Committee on Budget and Expenditure to<br />
advise <strong>the</strong> Governing Board on financial administration <strong>of</strong><br />
<strong>the</strong> Agency and to give its opinion on <strong>the</strong> Annual and o<strong>the</strong>r<br />
budget proposals submitted to <strong>the</strong> Governing Board.<br />
(b) instructed <strong>the</strong> Committee on Budget and Expenditure to<br />
convene its first session no later than 9th and 10th<br />
December, <strong>1974</strong>.<br />
<strong>The</strong> Budget Committee’s work is described in Chapter VII, Section E below.<br />
239
2. Procedures<br />
<strong>The</strong> Governing Board is empowered to fix <strong>the</strong> procedural rules <strong>of</strong> <strong>the</strong><br />
Committees, but in practice it has seldom done so. <strong>The</strong> procedural situation<br />
<strong>of</strong> <strong>the</strong> Committees is much like that <strong>of</strong> <strong>the</strong> Standing Groups [See Section B-<br />
2 above]. <strong>The</strong> Committees have not <strong>of</strong>ten confronted procedural questions.<br />
When <strong>the</strong>y have done so, <strong>the</strong> rules established for <strong>the</strong> Governing Board and<br />
<strong>the</strong> Standing Groups have been applicable, and <strong>the</strong> general approach to <strong>the</strong><br />
conduct <strong>of</strong> meetings in <strong>the</strong> Governing Board provided indirect guidance to<br />
<strong>the</strong> Committees as well as to <strong>the</strong> o<strong>the</strong>r organs. Aside from specifying work<br />
to be done and at times fixing deadlines for it, <strong>the</strong> tendency <strong>of</strong> <strong>the</strong> Board<br />
has been to leave to each body <strong>of</strong> <strong>the</strong> Agency <strong>the</strong> responsibility for making<br />
its own procedural decisions.<br />
240
CHAPTER VI<br />
<strong>The</strong> Secretariat<br />
<strong>The</strong> <strong>IEA</strong> Secretariat may be regarded as <strong>the</strong> centre <strong>of</strong> <strong>the</strong> visible, tangible<br />
and permanent presence <strong>of</strong> <strong>the</strong> Agency. <strong>The</strong> Secretariat consists <strong>of</strong><br />
approximately one hundred forty members stationed in OECD premises in<br />
Paris. Members <strong>of</strong> <strong>the</strong> Secretariat are chosen from highly qualified<br />
personnel from <strong>IEA</strong> Member countries. <strong>The</strong>ir function is not to represent<br />
<strong>the</strong>ir countries in <strong>the</strong> Agency, but to carry out <strong>the</strong> tasks <strong>of</strong> <strong>the</strong> Secretariat in<br />
an impartial way under <strong>the</strong> authority <strong>of</strong> <strong>the</strong> Executive Director, without<br />
seeking or accepting instructions from <strong>the</strong>ir governments or from any o<strong>the</strong>r<br />
external source. In <strong>the</strong> <strong>IEA</strong> system <strong>the</strong> Executive Director and Deputy also<br />
form part <strong>of</strong> <strong>the</strong> formal “Secretariat”; <strong>the</strong>y are subject to <strong>the</strong> same rule <strong>of</strong><br />
impartiality and with responsibility solely to <strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency,<br />
principally <strong>the</strong> Governing Board, in which all <strong>IEA</strong> Members are represented.<br />
Briefly stated, <strong>the</strong> role <strong>of</strong> <strong>the</strong> Secretariat is to carry out <strong>the</strong> tasks<br />
assigned to it in <strong>the</strong> I.E.P. Agreement and in Governing Board actions. This<br />
authority is quite specific and far-reaching in certain cases; for example, it is<br />
<strong>the</strong> Secretariat that makes <strong>the</strong> “finding” which could trigger <strong>the</strong> oil<br />
Emergency Sharing System. This authority extends broadly across all<br />
sectors <strong>of</strong> <strong>the</strong> Agency’s responsibilities. <strong>The</strong> more general tasks <strong>of</strong> <strong>the</strong><br />
Secretariat include <strong>the</strong> exercise <strong>of</strong> energy policy leadership in conjunction<br />
with <strong>the</strong> Governing Board and <strong>the</strong> Members, <strong>the</strong> initiation <strong>of</strong> policy<br />
directions, <strong>the</strong> preparation and presentation <strong>of</strong> action proposals to <strong>the</strong> organs<br />
<strong>of</strong> <strong>the</strong> Agency, and <strong>the</strong> provision <strong>of</strong> factual and policy research, analysis, and<br />
preparation <strong>of</strong> reports and o<strong>the</strong>r documents for those organs. <strong>The</strong><br />
Secretariat is charged as well with representation <strong>of</strong> <strong>the</strong> Agency in external<br />
relations, general logistical support and <strong>the</strong> execution <strong>of</strong> instructions <strong>of</strong> <strong>the</strong><br />
Governing Board. <strong>The</strong>se and o<strong>the</strong>r functions are described in more detail in<br />
Section E below in relation to <strong>the</strong> Executive Director, who bears <strong>the</strong> highest<br />
responsibility for <strong>the</strong> work <strong>of</strong> <strong>the</strong> Secretariat. References to <strong>the</strong> Secretariat’s<br />
work in greater detail will have been noticed in <strong>the</strong> foregoing Chapters and<br />
will be seen constantly in <strong>the</strong> Chapters that follow. <strong>The</strong> breadth <strong>of</strong> <strong>the</strong><br />
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Secretariat’s functions and expertise are apparent in <strong>the</strong> organization chart <strong>of</strong><br />
<strong>the</strong> Secretariat which is contained in Appendix V below.<br />
<strong>The</strong> <strong>IEA</strong> Secretariat was established within <strong>the</strong> mainstream concepts <strong>of</strong><br />
international organization secretariats, with a few variations occasioned by<br />
<strong>the</strong> particular tasks <strong>of</strong> <strong>the</strong> <strong>IEA</strong> in carrying out its operational responsibilities.<br />
This may be seen particularly in <strong>the</strong> Members’ agreement to lodge <strong>the</strong><br />
Secretariat administratively, subject to <strong>the</strong> Board’s override power, in <strong>the</strong><br />
OECD Secretariat which is an important representative <strong>of</strong> that mainstream.<br />
A. Powers <strong>of</strong> <strong>the</strong> Governing Board<br />
As <strong>the</strong> servant <strong>of</strong> <strong>the</strong> Member countries, <strong>the</strong> Secretariat is subject to control<br />
by <strong>the</strong> Governing Board in accordance with <strong>the</strong> I.E.P. Agreement. Article<br />
49.3 provides that “<strong>The</strong> Agency shall have a Secretariat to assist <strong>the</strong> organs<br />
mentioned in paragraphs 1 and 2 [<strong>of</strong> that Article] (virtually all <strong>the</strong> organs<br />
<strong>of</strong> <strong>the</strong> Agency). <strong>The</strong> governing Agreement provisions are Articles 59 and 60<br />
which provide in <strong>the</strong>ir entirety as follows:<br />
SECRETARIAT<br />
Article 59<br />
1. <strong>The</strong> Secretariat shall be composed <strong>of</strong> an Executive Director and<br />
such staff as is necessary.<br />
2. <strong>The</strong> Executive Director shall be appointed by <strong>the</strong> Governing<br />
Board.<br />
3. In <strong>the</strong> performance <strong>of</strong> <strong>the</strong>ir duties under this Agreement <strong>the</strong><br />
Executive Director and <strong>the</strong> staff shall be responsible to and report<br />
to <strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency.<br />
4. <strong>The</strong> Governing Board, acting by majority, shall take all decisions<br />
necessary for <strong>the</strong> establishment and functioning <strong>of</strong> <strong>the</strong> Secretariat.<br />
Article 60<br />
<strong>The</strong> Secretariat shall carry out <strong>the</strong> functions assigned to it in this Agreement<br />
and any o<strong>the</strong>r function assigned to it by <strong>the</strong> Governing Board.<br />
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Under <strong>the</strong>se provisions, <strong>the</strong> powers <strong>of</strong> <strong>the</strong> Board with respect to <strong>the</strong><br />
Secretariat are<br />
■<br />
■<br />
■<br />
To appoint <strong>the</strong> Executive Director.<br />
To take all decisions necessary for <strong>the</strong> establishment and <strong>the</strong><br />
functioning <strong>of</strong> <strong>the</strong> Secretariat.<br />
To assign functions to <strong>the</strong> Secretariat.<br />
In <strong>the</strong> aggregate, <strong>the</strong>se powers constitute plenary power <strong>of</strong> <strong>the</strong> Governing<br />
Board on this subject, limited only by <strong>the</strong> specific provisions elsewhere in<br />
<strong>the</strong> Agreement on particular actions <strong>of</strong> <strong>the</strong> Secretariat (for example with<br />
regard to <strong>the</strong> Emergency Sharing System).<br />
<strong>The</strong> Governing Board has exercised <strong>the</strong> Executive Director<br />
appointment power on <strong>the</strong> two occasions when <strong>the</strong> question has presented<br />
itself [See Section E-2 below] and has regularly and systematically assigned<br />
functions to <strong>the</strong> Secretariat [See Section E-1 below]. In addition to <strong>the</strong><br />
personnel decisions contained in <strong>the</strong> annual Programmes <strong>of</strong> Work and<br />
Budgets <strong>of</strong> <strong>the</strong> Agency [See Section B below], from time to time <strong>the</strong><br />
Governing Board has exercised <strong>the</strong> direct power to make decisions on <strong>the</strong><br />
administrative functioning <strong>of</strong> <strong>the</strong> Secretariat. At its first meeting, for<br />
example, <strong>the</strong> Board agreed [<strong>IEA</strong>/GB(74)9(1st Revision), Item 9] that<br />
■<br />
■<br />
■<br />
■<br />
■<br />
<strong>The</strong> <strong>IEA</strong> Staff should be free to work on Agency priorities and <strong>the</strong><br />
Budget should reflect this element.<br />
<strong>The</strong> Governing Board should return to <strong>the</strong> question <strong>of</strong> a joint Staff for<br />
<strong>the</strong> <strong>IEA</strong> and OECD Energy Directorate.<br />
It would consider arrangements for Staff to be aligned in <strong>the</strong><br />
Secretariat to correspond with <strong>the</strong> Standing Groups.<br />
<strong>The</strong> Executive Director could begin exploring for Staff with a view to<br />
obtaining <strong>the</strong> necessary high quality Staff as quickly as possible.<br />
<strong>The</strong> Budget Committee should consider Staff priority needs for <strong>the</strong><br />
Agency to become operational.<br />
At its second meeting, <strong>the</strong> Board again took a number <strong>of</strong> important<br />
decisions concerning <strong>the</strong> Secretariat [<strong>IEA</strong>/GB(74)11(1st Revision), Item 5].<br />
One <strong>of</strong> <strong>the</strong> most far-reaching was <strong>the</strong> approval <strong>of</strong> <strong>the</strong> concept <strong>of</strong> a<br />
“Combined Energy Staff” by which (1) <strong>the</strong> Agency Staff would serve both<br />
<strong>the</strong> <strong>IEA</strong> and <strong>the</strong> OECD on energy questions and (2) <strong>the</strong> OECD would make<br />
a corresponding financial contribution to <strong>the</strong> <strong>IEA</strong> Budgets, an arrangement<br />
that continued in effect until <strong>the</strong> end <strong>of</strong> 1993 [Item 5(b); this subject is<br />
243
examined in detail in Section D below]. In <strong>1974</strong> <strong>the</strong> Governing Board also<br />
adopted <strong>the</strong> first structural organization <strong>of</strong> <strong>the</strong> <strong>IEA</strong> [Item 5(c); <strong>the</strong> first <strong>IEA</strong><br />
organization chart] and noted Executive Director Lantzke’s assurance that<br />
he would “only recruit very high quality staff even if this may result in a<br />
delay in filling some posts” [Item 5(d)]. At that time, <strong>the</strong> Board also<br />
adopted a “three year appointment policy” by inviting:<br />
<strong>the</strong> Executive Director to recruit mainly government <strong>of</strong>ficials<br />
for <strong>the</strong> A-grade posts and to recruit this staff on a fixed term<br />
basis (staff members currently having indefinite appointments<br />
with <strong>the</strong> OECD would retain <strong>the</strong>m) for, in principle, approximately<br />
three years with necessary flexibility in duration on a<br />
case by case basis [Item 5(f)].<br />
<strong>The</strong> Governing Board’s decisions adopting <strong>the</strong> extraordinary elements <strong>of</strong> <strong>the</strong><br />
appointments <strong>of</strong> <strong>the</strong> Executive Director and Deputy Executive Director are<br />
described respectively in Sections E-5 and F-4 below. More recently, in<br />
connection with <strong>the</strong> <strong>1994</strong> Budget, <strong>the</strong> Governing Board continued <strong>the</strong><br />
regular practice <strong>of</strong> endorsing <strong>the</strong> Executive Director’s efforts to keep<br />
Delegations informed as to pr<strong>of</strong>essional Staff recruitment and invited <strong>the</strong><br />
Executive Director to keep Delegations and relevant bodies informed<br />
<strong>of</strong> consultancy projects and costs related <strong>the</strong>reto [<strong>IEA</strong>/GB(93)65, Item<br />
2(f)(viii) and (ix)].<br />
B. Establishment <strong>of</strong> <strong>the</strong> Secretariat<br />
<strong>The</strong> Secretariat has taken organizational form and substance in <strong>the</strong><br />
Programmes <strong>of</strong> Work and Budget decisions, initially in <strong>the</strong> decision for<br />
1975, and <strong>the</strong>reafter in decisions adjusting <strong>the</strong> organization <strong>of</strong> <strong>the</strong><br />
Secretariat. <strong>The</strong>se decisions determine <strong>the</strong> structure <strong>of</strong> <strong>the</strong> Secretariat with<br />
<strong>the</strong> distribution <strong>of</strong> Staff among <strong>the</strong> various Offices, Divisions and o<strong>the</strong>r<br />
units, as well as <strong>the</strong> number <strong>of</strong> Staff and <strong>the</strong>ir respective grades.<br />
<strong>The</strong> first comprehensive organization <strong>of</strong> <strong>the</strong> Secretariat as established<br />
in <strong>1974</strong> has varied only modestly over <strong>the</strong> years, <strong>the</strong> structure remaining<br />
essentially as foreseen at <strong>the</strong> outset. Significant additions include <strong>the</strong> Office<br />
<strong>of</strong> Energy Technology and Research and Development, <strong>the</strong> Economics,<br />
Statistics and Information Systems Office, <strong>the</strong> Public Affairs Advisor and<br />
Staff, and <strong>the</strong> Energy and Environment Division. <strong>The</strong>re have also been<br />
244
various name changes <strong>of</strong> Offices and Divisions, as well as <strong>the</strong> shifting <strong>of</strong><br />
Divisions among Offices and <strong>the</strong> creation <strong>of</strong> new Divisions [See annual<br />
Programme <strong>of</strong> Work and Budget documents for records <strong>of</strong> <strong>the</strong> foregoing]. In<br />
<strong>the</strong> 1993 Budget decision, for example, <strong>the</strong> following adjustments in<br />
organization took place: <strong>the</strong> Economics, Statistics and Information Systems<br />
Office was formed with separate Divisions for <strong>the</strong> three sectors covered by that<br />
Office, <strong>the</strong> Office <strong>of</strong> Oil Markets and Emergency Preparedness was formed<br />
with two Divisions covering those sectors and <strong>the</strong> Office <strong>of</strong> Non-Member<br />
Countries was established with two geographic Divisions [See <strong>IEA</strong>/GB(92)53,<br />
Item 6 and documents cited]. <strong>The</strong> authorized manning <strong>of</strong> <strong>the</strong> Secretariat has<br />
grown modestly from about 92 in 1975 to 140 in <strong>1994</strong>, in about <strong>the</strong> same<br />
proportion as <strong>the</strong> growth in <strong>IEA</strong> membership over <strong>the</strong> same period.<br />
<strong>The</strong> current organization <strong>of</strong> <strong>the</strong> Secretariat, set forth in Appendix V<br />
hereto, was initially patterned in line with <strong>the</strong> Standing Groups and <strong>the</strong><br />
Committees, with <strong>the</strong> Secretariat sectorial Offices and Divisions being at<br />
times identifiable with <strong>the</strong> corresponding organs <strong>of</strong> <strong>the</strong> Agency; that pattern<br />
has largely continued. <strong>The</strong> sectorial Offices all work on a horizontal basis as<br />
well, serving o<strong>the</strong>r sectors when that would be necessary. <strong>The</strong> Office <strong>of</strong> <strong>the</strong><br />
Executive Director, including <strong>the</strong> Deputy Executive Director and <strong>the</strong> units<br />
comprising <strong>the</strong> Legal Counsel, Public Affairs and Administration, serve all<br />
sectors <strong>of</strong> <strong>IEA</strong> work as does <strong>the</strong> Economics, Statistics and Information<br />
Systems Office.<br />
In addition to <strong>the</strong> regularly established permanent Secretariat<br />
members, <strong>the</strong> Agency requires specialized support for particular projects<br />
and functions, which is provided in <strong>the</strong> form <strong>of</strong> “Project Staff” and<br />
Consultants. <strong>The</strong> appointments in <strong>the</strong>se categories <strong>of</strong> Staff are tailored to<br />
meet special and sometimes non-recurring needs. <strong>The</strong> appointment <strong>of</strong><br />
Project Staff is authorized each year by <strong>the</strong> Governing Board in <strong>the</strong> Budget<br />
decision, under <strong>the</strong> basic pattern established in 1987. In <strong>the</strong> Budget<br />
decision for that year <strong>the</strong> Governing Board [<strong>IEA</strong>/GB(86)45, Item 2(j)(vi)]<br />
(vi) authorized <strong>the</strong> Executive Director, until such time as <strong>the</strong><br />
Board should reach a different decision, to continue<br />
recruitment <strong>of</strong> personnel “project staff” under <strong>the</strong> same<br />
conditions <strong>of</strong> employment as permanent staff for a limited<br />
period to carry out specific projects related to <strong>the</strong> Agency’s<br />
Programme <strong>of</strong> Work, which appointments should not<br />
exceed <strong>the</strong> duration <strong>of</strong> <strong>the</strong> respective activities. <strong>The</strong><br />
Executive Director will inform <strong>the</strong> Budget Committee or its<br />
open-ended Working Group <strong>of</strong> developments in this area.<br />
245
Although on one occasion a Project Staff member was specifically<br />
authorized by <strong>the</strong> Board for an identified project (a special advisor for three<br />
years to work on certain environment related projects), <strong>the</strong> Board has given<br />
a continuing authorization in general terms, stating that <strong>the</strong> Board “carried<br />
forward its previous authorizations to <strong>the</strong> Executive Director, until such<br />
time as <strong>the</strong> Board shall reach a different decision, with respect to <strong>the</strong><br />
recruitment <strong>of</strong> Project staff” [See e.g. <strong>IEA</strong>/GB(92)53, Item 6(o)]. Pursuant<br />
to such authorizations Project Staff have served in many <strong>of</strong> <strong>the</strong> units <strong>of</strong> <strong>the</strong><br />
Secretariat, each appointed in <strong>the</strong> same fashion and with generally <strong>the</strong> same<br />
terms and conditions as o<strong>the</strong>r Staff, but only for a fixed term, <strong>of</strong>ten for one<br />
or two years. This process has permitted a flexible approach to shorter term<br />
Staff needs, while providing Staff Member status to <strong>the</strong> individual when<br />
that status is indicated. In o<strong>the</strong>r cases, <strong>of</strong>ten for highly specialized shorterterm<br />
projects for which Staff Member appointment as Project Staff would<br />
not be necessary, <strong>the</strong> appointment <strong>of</strong> consultants may be made, and this has<br />
become a regular and indispensable procedure for <strong>the</strong> Agency (<strong>the</strong>y are<br />
appointed under <strong>the</strong> OECD Regulations, Rules and Instructions for Council<br />
Experts and Consultants).<br />
Project Staff and consultants have been appointed in most sectors <strong>of</strong><br />
<strong>the</strong> Agency’s responsibilities. In <strong>1994</strong> for example Project Staff and<br />
consultants were engaged in work on specialized issues in energy and <strong>the</strong><br />
environment, energy supply and demand technical analysis, jobs and<br />
energy, efficiency and environment, energy diversification and security, <strong>the</strong><br />
coal information system, oil markets, <strong>IEA</strong> institutional history, non-OECD<br />
energy data, energy technology collaboration, certain technology priorities,<br />
market deployment <strong>of</strong> new technologies, technology outreach to non-<br />
Member countries, technologies for energy end-use efficiency, energy<br />
analysis related to non-Member countries and regional integration. In each<br />
year’s Budget documents, <strong>the</strong> Secretariat lists <strong>the</strong> principal projects which<br />
are expected to be carried out during <strong>the</strong> year by Project Staff and consultants<br />
[For <strong>1994</strong>, for example, see <strong>IEA</strong>/GB(93)63, Attachment B, p. 21].<br />
As a result <strong>of</strong> <strong>the</strong> administrative arrangements made between <strong>the</strong> <strong>IEA</strong><br />
and <strong>the</strong> OECD, <strong>the</strong> Agency has not been required to build up an extensive<br />
logistical Staff <strong>of</strong> its own. OECD Staff provide <strong>the</strong> Agency with support for<br />
routine aspects <strong>of</strong> publications, personnel administration, financial affairs,<br />
conference services, document reproduction and distribution, translation<br />
and interpretation, purchasing, building administration and mail. Although<br />
<strong>the</strong> key elements closest to <strong>IEA</strong> policy on those logistical functions are<br />
managed within <strong>the</strong> <strong>IEA</strong>, <strong>the</strong> bulk <strong>of</strong> <strong>the</strong> routine functions are carried out<br />
by OECD ra<strong>the</strong>r than <strong>IEA</strong> personnel.<br />
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C. Relation to <strong>the</strong> OECD<br />
<strong>The</strong> administrative integration <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Secretariat into <strong>the</strong> OECD was one <strong>of</strong><br />
<strong>the</strong> principal reasons for <strong>the</strong> decision <strong>of</strong> <strong>the</strong> founders to lodge <strong>the</strong> Agency in <strong>the</strong><br />
OECD as an autonomous Agency [See Chapter II, Section B-2 above]. That was<br />
one <strong>of</strong> <strong>the</strong> arrangements which enabled <strong>the</strong> Agency to commence operations<br />
immediately without <strong>the</strong> relatively slow start-up that would have ensued from <strong>the</strong><br />
need to create all <strong>the</strong> Secretariat support services from point zero, as would have<br />
been <strong>the</strong> case if <strong>the</strong> alternative <strong>of</strong> a wholly separate and independent Agency had<br />
been adopted. Subject to <strong>the</strong> Governing Board’s override responsibility, <strong>the</strong> <strong>IEA</strong><br />
Staff accordingly became members <strong>of</strong> <strong>the</strong> OECD Secretariat from <strong>the</strong> outset,<br />
and those who transferred directly from <strong>the</strong> OECD were immediately set in place<br />
with all <strong>the</strong> necessary administrative elements already arranged.<br />
On <strong>the</strong> OECD side <strong>the</strong> formal action for <strong>the</strong>se arrangements was<br />
contained in <strong>the</strong> Council Decision which provides in Article 7 that<br />
Article 7<br />
(a) <strong>The</strong> organs <strong>of</strong> <strong>the</strong> Agency shall be assisted by an Executive<br />
Director and such staff as is necessary who shall form part <strong>of</strong><br />
<strong>the</strong> Secretariat <strong>of</strong> <strong>the</strong> Organisation and who shall, in performing<br />
<strong>the</strong>ir duties under <strong>the</strong> International Energy Program, be<br />
responsible to and report to <strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency.<br />
(b) <strong>The</strong> Executive Director shall be appointed by <strong>the</strong> Governing<br />
Board on <strong>the</strong> proposal or with <strong>the</strong> concurrence <strong>of</strong> <strong>the</strong><br />
Secretary-General.<br />
(c) Consultants to <strong>the</strong> Agency may be appointed for a period<br />
exceeding that provided in Regulation 2(b) <strong>of</strong> <strong>the</strong> Regulations<br />
and Rules for Council Experts and Consultants <strong>of</strong> <strong>the</strong><br />
Organisation.<br />
As a consequence, all <strong>IEA</strong> Staff have been appointed administratively as<br />
OECD Staff Members and in accordance largely with established OECD<br />
procedures and terms <strong>of</strong> employment, although <strong>the</strong> principal assessment <strong>of</strong><br />
<strong>the</strong> qualifications and suitability <strong>of</strong> all <strong>IEA</strong> Staff candidates rests with <strong>the</strong><br />
Agency. <strong>The</strong> Agency fixes <strong>the</strong> job description with technical advisory<br />
assistance from <strong>the</strong> OECD, performs <strong>the</strong> substantive interviewing and<br />
makes <strong>the</strong> formal proposal. OECD personnel appointment review<br />
procedures are followed as a normal safeguard, for <strong>the</strong> <strong>IEA</strong> did not wish to<br />
247
duplicate <strong>the</strong>m. Upon <strong>the</strong> completion <strong>of</strong> <strong>the</strong>se procedures, <strong>the</strong> OECD Staff<br />
appointment follows in due course.<br />
Under <strong>the</strong>ir OECD appointments, <strong>the</strong> <strong>IEA</strong> Staff are subject to <strong>the</strong><br />
OECD Staff Regulations, Rules and Instructions, as are OECD Staff<br />
serving in o<strong>the</strong>r sectors. <strong>IEA</strong> Staff are thus bound by OECD duties <strong>of</strong><br />
impartiality and independence. Under Regulation 2 a), “<strong>The</strong> duties <strong>of</strong><br />
<strong>of</strong>ficials <strong>of</strong> <strong>the</strong> Organisation are international in character”; under 2 b),<br />
“Officials shall nei<strong>the</strong>r seek nor accept instructions from any <strong>of</strong> <strong>the</strong><br />
Members <strong>of</strong> <strong>the</strong> Organisation or from any Government or authority<br />
external to <strong>the</strong> Organisation”; and under 2 c), “Officials shall carry out<br />
<strong>the</strong>ir duties and regulate <strong>the</strong>ir conduct bearing always in mind <strong>the</strong> interests<br />
<strong>of</strong> <strong>the</strong> Organisation”. <strong>The</strong> governing provisions also treat comprehensively<br />
and systematically such matters as Staff loyalty, rights <strong>of</strong> association,<br />
discretion and intellectual property, privileges, immunities and protection,<br />
appointment, posting and termination, salaries, allowances and benefits<br />
and general employment conditions and procedures. As OECD Staff<br />
Members, <strong>IEA</strong> personnel are covered by <strong>the</strong> privileges and immunities<br />
applicable in accordance with <strong>the</strong> legal texts. In utilizing <strong>the</strong> OECD<br />
personnel system in <strong>the</strong> foregoing fashion, <strong>the</strong> Agency was saved <strong>the</strong><br />
burden <strong>of</strong> developing a separate and largely parallel system. <strong>The</strong> OECD<br />
personnel system, toge<strong>the</strong>r with o<strong>the</strong>r support services, was <strong>of</strong>fered readymade<br />
to <strong>the</strong> Agency during its start-up period. In turn <strong>the</strong> Agency was<br />
able to <strong>of</strong>fer <strong>the</strong> OECD enhanced Secretariat service in place <strong>of</strong> <strong>the</strong><br />
Organisation’s previous general energy work, under arrangements which<br />
led almost immediately after <strong>the</strong> Agency was established to <strong>the</strong> creation <strong>of</strong><br />
<strong>the</strong> “Combined Energy Staff”. <strong>IEA</strong> and general OECD energy Secretariat<br />
work has been successfully organized under those arrangements to <strong>the</strong><br />
present day (recent changes in financing <strong>the</strong> Combined Energy Staff are<br />
described in following Section).<br />
D. Combined Energy Staff<br />
1. Establishment<br />
When <strong>the</strong> Agency was founded in <strong>1974</strong> <strong>the</strong> relations between <strong>the</strong> <strong>IEA</strong> and<br />
<strong>the</strong> OECD were carefully considered and arranged as described in Chapter<br />
IV, Section C above. Effective programme and financing autonomy <strong>of</strong> <strong>the</strong><br />
<strong>IEA</strong> was a prime concern <strong>of</strong> <strong>the</strong> founders, and that was achieved. <strong>The</strong><br />
OECD Secretary-General (as well as <strong>the</strong> <strong>IEA</strong> founders) were also concerned<br />
248
about energy work continuing in <strong>the</strong> OECD because only sixteen <strong>of</strong> <strong>the</strong><br />
twenty-four OECD Members were initially Members <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, and <strong>the</strong><br />
continuation <strong>of</strong> OECD energy work for <strong>the</strong> o<strong>the</strong>r eight countries, including<br />
France, was essential. That work was to be carried out mainly in <strong>the</strong> new<br />
Committee for Energy Policy which was established with that function in<br />
mind [See Section D-2 below], but substantial Staff support had to be<br />
dedicated broadly in one fashion or ano<strong>the</strong>r for OECD energy work to be<br />
carried out efficiently and without duplication.<br />
<strong>The</strong>re were essentially two alternative solutions to <strong>the</strong> problem <strong>of</strong><br />
continuing energy work in <strong>the</strong> OECD once <strong>the</strong> autonomous <strong>IEA</strong> was<br />
established. <strong>The</strong> first was to maintain a separate OECD energy Staff, in<br />
addition to <strong>the</strong> <strong>IEA</strong> Staff which was expected to grow rapidly in numbers<br />
and expertise. <strong>The</strong> second was to integrate <strong>the</strong> two into a single “Combined<br />
Energy Staff”. <strong>The</strong> latter solution was recommended by <strong>the</strong> <strong>IEA</strong> Secretariat<br />
to <strong>the</strong> Governing Board at its first meeting on 18 November <strong>1974</strong><br />
[<strong>IEA</strong>/GB(74)6, Annex I, paragraphs 5 and 8] which decided to return to<br />
this subject at its next meeting held in <strong>the</strong> following month<br />
[<strong>IEA</strong>/GB(74)9(1st Revision), Item 9(b)]. At <strong>the</strong> second meeting, when <strong>the</strong><br />
Board had <strong>the</strong> <strong>IEA</strong> Budget Committee’s favorable recommendation on <strong>the</strong><br />
Combined Energy Staff proposal [<strong>IEA</strong>/BC(74)1, paragraph 3], <strong>the</strong> Board<br />
formally approved <strong>the</strong> concept <strong>of</strong> a Combined Energy Staff and transmitted<br />
it to <strong>the</strong> OECD Council for adoption as part <strong>of</strong> <strong>the</strong> Agency’s 1975 Budget<br />
proposal [<strong>IEA</strong>/GB(74)11(1st Revision), Item 5(b)].<br />
<strong>The</strong> rationale for <strong>the</strong> Combined Energy Staff proposal showed<br />
benefits both for OECD Members and <strong>IEA</strong> Members. It provided a greater<br />
amount <strong>of</strong> Secretariat energy expertise to all OECD Member countries, at no<br />
additional expense under Part I <strong>of</strong> <strong>the</strong> OECD Budget, and it met <strong>the</strong> needs<br />
<strong>of</strong> <strong>the</strong> Agency, by combining <strong>the</strong> permanent Staff posts <strong>the</strong>n allocated to <strong>the</strong><br />
OECD Energy Directorate under Part I <strong>of</strong> <strong>the</strong> OECD Budget with posts to<br />
be created under Part II <strong>of</strong> <strong>the</strong> Budget by <strong>the</strong> <strong>IEA</strong>. For both <strong>the</strong> OECD and<br />
<strong>IEA</strong> unnecessary duplication <strong>of</strong> staffing was avoided. <strong>The</strong> Combined<br />
Energy Staff was thus a concept <strong>of</strong> merger <strong>of</strong> <strong>the</strong> old (<strong>the</strong> OECD energy<br />
staff), with <strong>the</strong> new (<strong>the</strong> additional staff which would have to be engaged to<br />
perform <strong>the</strong> new <strong>IEA</strong> Secretariat functions). <strong>The</strong>y would both be merged<br />
into <strong>the</strong> Combined Energy Staff under <strong>the</strong> responsibility <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
Executive Director.<br />
<strong>The</strong> number <strong>of</strong> posts to be financed under Part I worked out to be<br />
thirty-nine. That financing was arranged in <strong>the</strong> 1975 Budget and was<br />
standardized in <strong>the</strong> 1976 <strong>IEA</strong> draft Budget document with this statement<br />
[<strong>IEA</strong>/GB(75)83, Annex III, pp. 39-40]:<br />
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As in 1975, it is proposed that <strong>the</strong> 1976 Budget for <strong>the</strong><br />
International Energy Agency, including <strong>the</strong> costs <strong>of</strong> <strong>the</strong><br />
Combined Energy Staff, be approved in its entirety, and that<br />
Member countries <strong>of</strong> <strong>the</strong> Organisation be invited, as for <strong>the</strong><br />
1975 Budget, to finance under Part I <strong>of</strong> <strong>the</strong> Budget <strong>of</strong> <strong>the</strong><br />
Organisation an amount corresponding to <strong>the</strong> emoluments for<br />
39 permanent staff positions; <strong>the</strong> actual amount to be financed<br />
under Part II <strong>of</strong> <strong>the</strong> Budget <strong>of</strong> <strong>the</strong> Organisation to equal <strong>the</strong><br />
excess <strong>of</strong> <strong>the</strong> total Agency Budget over <strong>the</strong> amount financed<br />
under Part I.<br />
This financing arrangement was followed each year afterwards without<br />
difficulty until questions about its suitability arose in 1992 when Finland<br />
and France joined <strong>the</strong> Agency, leaving Iceland as <strong>the</strong> only OECD country<br />
not a Member <strong>of</strong> <strong>the</strong> <strong>IEA</strong>. By that time <strong>the</strong> basis <strong>of</strong> calculation <strong>of</strong> Part I and<br />
Part II contributions for <strong>IEA</strong> on <strong>the</strong> historical basis was almost identical and<br />
<strong>the</strong> costs to all Members were becoming almost <strong>the</strong> same whe<strong>the</strong>r <strong>the</strong>y were<br />
maintained in <strong>the</strong> old pattern or were all merged into <strong>the</strong> <strong>IEA</strong> Budget under<br />
Part II. In <strong>the</strong> course <strong>of</strong> <strong>the</strong> OECD Auditors’ examination <strong>of</strong> <strong>IEA</strong> finances<br />
for 1991, questions about <strong>the</strong> continuing soundness <strong>of</strong> <strong>the</strong> foregoing<br />
financing were raised with <strong>the</strong> Agency [Enquiry Ber<strong>the</strong>/<strong>IEA</strong> Executive<br />
Director CC 92/07, 22 June 1992] and later in <strong>the</strong> Auditors Report [See<br />
<strong>IEA</strong>/BC(92)6]. <strong>The</strong> Executive Director’s reply <strong>of</strong> 17 July 1992 to <strong>the</strong><br />
Auditors [<strong>IEA</strong>/ED(92)123], prepared in consultation with <strong>the</strong> OECD<br />
Budget and Finance Directorate, noted that for this financing arrangement<br />
<strong>the</strong> relevant “. . . policy decision does not lend itself to orthodox budgetary<br />
analysis”. Citing <strong>the</strong> governing legal texts, <strong>the</strong> reply concluded: “Thus, a<br />
decision to modify <strong>the</strong> level <strong>of</strong> financing <strong>of</strong> a portion <strong>of</strong> <strong>the</strong> Agency’s Budget<br />
under Part I would have to be taken by <strong>the</strong> <strong>IEA</strong> Governing Board and<br />
proposed to <strong>the</strong> Council for adoption at <strong>the</strong> appropriate time”.<br />
Considerations which tended to favor <strong>the</strong> merger <strong>of</strong> Part I funding<br />
into Part II included <strong>the</strong> following [See Memorandum Bamberger/Steeg,<br />
1 October 1992 and Annex]:<br />
■<br />
With France now an <strong>IEA</strong> Member, <strong>the</strong>re seemed to be little reason to<br />
maintain Part I, especially with <strong>the</strong> inactivity <strong>of</strong> <strong>the</strong> Committee for<br />
Energy Policy (which presumably would be allowed to terminate<br />
upon <strong>the</strong> expiration <strong>of</strong> its mandate on 28 April 1995 or could be<br />
terminated earlier if that should be desired) and <strong>the</strong> OECD Secretariat<br />
proposals to abrogate all <strong>the</strong> remaining Council Decisions dealing<br />
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■<br />
■<br />
■<br />
■<br />
with energy questions; with <strong>the</strong>se actions in place all OECD work on<br />
energy (o<strong>the</strong>r than <strong>the</strong> Nuclear Energy Agency (NEA) work) would<br />
fall squarely and exclusively on <strong>the</strong> <strong>IEA</strong>, and this would need to be<br />
recognized as such in <strong>the</strong> <strong>IEA</strong> Part II Budget.<br />
With <strong>the</strong> decline in Part I funding as a percentage <strong>of</strong> <strong>the</strong> total funding<br />
for <strong>the</strong> Agency over <strong>the</strong> years and <strong>the</strong> increase in <strong>IEA</strong> membership to<br />
all but one OECD Member, <strong>the</strong> level <strong>of</strong> <strong>the</strong> Part I contribution could<br />
be viewed as excessive.<br />
<strong>The</strong> funding merger would end <strong>the</strong> anomaly <strong>of</strong> continuing Part I on<br />
thirty-nine posts which had little or no bearing on <strong>the</strong> situation <strong>of</strong> <strong>the</strong><br />
Agency and its relation to <strong>the</strong> OECD, and it would end <strong>the</strong> administrative<br />
effort required to develop and operate two separate funding<br />
systems each year.<br />
By <strong>the</strong> removal <strong>of</strong> <strong>the</strong> Part I contribution, <strong>the</strong> <strong>IEA</strong> would have <strong>the</strong><br />
political advantage <strong>of</strong> being fur<strong>the</strong>r protected against dependency on<br />
OECD procedures; no part <strong>of</strong> <strong>IEA</strong> funding would remain subject even<br />
to a <strong>the</strong>oretical veto in <strong>the</strong> Council (as minimal a risk as that might be).<br />
<strong>The</strong>re would not seem to be any anomaly in <strong>the</strong> financial consequences<br />
<strong>of</strong> <strong>the</strong> merger, for none <strong>of</strong> <strong>the</strong> Members would pay more or<br />
less than before (except for <strong>the</strong> slight increases to make up <strong>the</strong> loss <strong>of</strong><br />
<strong>the</strong> small contribution from Iceland).<br />
One possible disadvantage <strong>of</strong> <strong>the</strong> merger could not be ignored. If <strong>the</strong>re<br />
should be in <strong>the</strong> future new OECD Members which do not join <strong>the</strong> <strong>IEA</strong>, <strong>the</strong><br />
problem <strong>of</strong> <strong>the</strong>se countries paying a fair share could arise again; however,<br />
<strong>the</strong> thirty-nine post scenario would certainly seem anomalous to <strong>the</strong>se<br />
countries, and if partial funding under Part I should become necessary, a<br />
new basis <strong>of</strong> calculation would have to be developed in any case.<br />
On balance <strong>the</strong> case for making <strong>the</strong> change seemed stronger than <strong>the</strong><br />
case for <strong>the</strong> traditional approach. In June 1993 <strong>the</strong> Secretariat distributed<br />
an <strong>IEA</strong> Budget Committee document [<strong>IEA</strong>/BC(93)6], concluding on <strong>the</strong><br />
basis <strong>of</strong> fur<strong>the</strong>r analysis <strong>of</strong> this question that “<strong>The</strong> situation to which <strong>the</strong><br />
Part I energy funding was addressed has essentially ceased to exist” [at p.<br />
2] and noting <strong>the</strong> intention <strong>of</strong> <strong>the</strong> Secretary-General in <strong>the</strong> OECD <strong>1994</strong><br />
Programme <strong>of</strong> Work and Budget to eliminate <strong>the</strong> Part I funding <strong>of</strong> <strong>the</strong><br />
thirty-nine posts. <strong>The</strong> Secretariat invited <strong>the</strong> Committee to recommend to<br />
<strong>the</strong> Board for <strong>1994</strong> and subsequent years to finance <strong>the</strong> <strong>IEA</strong> Budget in its<br />
entirety by Part II “subject to a parallel decision <strong>of</strong> <strong>the</strong> OECD” and to<br />
consider whe<strong>the</strong>r <strong>the</strong> mandate <strong>of</strong> <strong>the</strong> Committee for Energy Policy “should<br />
be terminated or allowed to expire” [at p. 3]. <strong>The</strong> Budget Committee gave<br />
251
a favourable response [<strong>IEA</strong>/BC(93)7, Item 2(v)], on which <strong>the</strong> Governing<br />
Board in turn acted at its October 1993 meeting, in agreeing<br />
that <strong>the</strong> Budget <strong>of</strong> <strong>the</strong> International Energy Agency in <strong>1994</strong> and<br />
subsequent years will be financed in its entirety under Part II <strong>of</strong><br />
<strong>the</strong> Budget <strong>of</strong> <strong>the</strong> Organisation, subject to a parallel decision <strong>of</strong><br />
<strong>the</strong> OECD [<strong>IEA</strong>/GB(93)57, Item 3(b)].<br />
That decision was given effect in <strong>the</strong> Governing Board’s decision on <strong>the</strong><br />
<strong>1994</strong> Budget [<strong>IEA</strong>/GB(93)65, Item 2(f); <strong>IEA</strong>/GB(93)63, Attachment B and<br />
Corrigendum], and <strong>the</strong> Agency’s <strong>1994</strong> Budget was adopted without<br />
provision for <strong>the</strong> Part I contribution from <strong>the</strong> OECD. <strong>The</strong> financing <strong>of</strong> <strong>the</strong><br />
Agency’s entire Budget was provided under its own Part II Budget.<br />
2. Services to <strong>the</strong> OECD<br />
In <strong>1974</strong>-1975 <strong>the</strong> Combined Energy Staff, in addition to its Agency functions,<br />
took responsibility for all <strong>of</strong> <strong>the</strong> general energy policy and statistical<br />
support services previously carried out by <strong>the</strong> energy Staff <strong>of</strong> <strong>the</strong> OECD.<br />
<strong>The</strong> OECD general energy Staff was brought into <strong>the</strong> Combined Energy<br />
Staff, leaving <strong>the</strong> OECD without support Staff in <strong>the</strong> general energy field<br />
except for <strong>the</strong> Nuclear Energy Agency Staff which was not directly affected<br />
by <strong>the</strong> transfers. As part <strong>of</strong> <strong>the</strong> overall arrangements, <strong>the</strong> Combined Energy<br />
Staff fulfilled <strong>the</strong> general energy functions which had previously been carried<br />
out under <strong>the</strong> authority <strong>of</strong> <strong>the</strong> Secretary-General but which now came within<br />
<strong>the</strong> responsibility <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Executive Director as head <strong>of</strong> <strong>the</strong> Combined<br />
Energy Staff. <strong>The</strong> integration <strong>of</strong> <strong>the</strong> former OECD energy personnel and <strong>the</strong><br />
newly recruited <strong>IEA</strong> personnel into a single Staff was made without any<br />
distinction between <strong>the</strong> two groups <strong>of</strong> individuals. No member <strong>of</strong> <strong>the</strong> Staff<br />
was assigned to work particularly on OECD matters or <strong>IEA</strong> matters, and no<br />
member <strong>of</strong> <strong>the</strong> Staff was identified as assigned to one <strong>of</strong> <strong>the</strong> thirty-nine<br />
Combined Energy Staff posts financed overall by <strong>the</strong> OECD by means <strong>of</strong><br />
Part I <strong>of</strong> <strong>the</strong> OECD Budget. This arrangement was thus fully successful from<br />
<strong>the</strong> standpoint <strong>of</strong> personnel management. Consequently, when <strong>the</strong> thirty-nine<br />
post arrangement was abolished in <strong>the</strong> <strong>1994</strong> <strong>IEA</strong> Budget, <strong>the</strong>re was no<br />
perceptible change in <strong>the</strong> working arrangements and individual outlooks <strong>of</strong><br />
<strong>the</strong> members <strong>of</strong> <strong>the</strong> Combined Energy Staff.<br />
<strong>The</strong> Combined Energy Staff from <strong>the</strong> outset has provided a variety <strong>of</strong><br />
functions for OECD in <strong>the</strong> energy field, and continues in <strong>1994</strong> to do so.<br />
<strong>The</strong> Executive Director, with support from <strong>the</strong> Deputy, has served <strong>the</strong><br />
252
OECD as <strong>the</strong> Co-ordinator <strong>of</strong> Energy Policies for <strong>the</strong> Organisation as a<br />
whole. In that capacity <strong>the</strong> Executive Director regularly advises <strong>the</strong><br />
Secretary-General, as well as <strong>the</strong> Council, <strong>the</strong> Executive Committee in<br />
Special Session and o<strong>the</strong>r bodies <strong>of</strong> OECD, on energy policy and related<br />
questions. For Ministerial Level meetings <strong>of</strong> <strong>the</strong> Council <strong>the</strong> Executive<br />
Director provides draft Communiqué language and general background on<br />
energy policy. Energy policy and technical advice have been provided by<br />
<strong>the</strong> Staff, as appropriate, to all parts <strong>of</strong> <strong>the</strong> OECD Secretariat, and<br />
particularly to <strong>the</strong> Economics and Environment Directorates, <strong>the</strong> Nuclear<br />
Energy Agency and <strong>the</strong> Centre for European Economies in Transition. <strong>The</strong><br />
Combined Energy Staff took over <strong>the</strong> OECD Energy Statistics publications<br />
which <strong>the</strong>n appeared under <strong>the</strong> following new titles: Energy Statistics <strong>of</strong><br />
OECD Countries, Annual Oil and Gas Statistics, Quarterly Oil Statistics<br />
and Electricity Supply Industry (<strong>the</strong> latter was last published in 1978, and<br />
re-started in 1992 as Electricity Information).<br />
<strong>The</strong> Combined Energy Staff has also provided general Secretariat<br />
services for <strong>the</strong> OECD Committee on Energy Policy, created by <strong>the</strong> Council<br />
on 29 April 1975 [<strong>The</strong> mandate is set forth in C(76)91(Final)]. This<br />
Committee was created to absorb <strong>the</strong> functions <strong>of</strong> <strong>the</strong> former OECD Energy<br />
Committee, <strong>the</strong> Oil Committee and its High-Level Group, and to provide an<br />
OECD-wide forum on “all energy resources” not only for Members <strong>of</strong> <strong>the</strong><br />
<strong>IEA</strong>, but in particular for <strong>the</strong> eight OECD Members which did not<br />
participate in <strong>the</strong> Agency at <strong>the</strong> outset, <strong>the</strong> number which is now reduced to<br />
one (Iceland). <strong>The</strong> Committee was mandated as well to “promote <strong>the</strong> cooperation<br />
<strong>of</strong> Member countries in <strong>the</strong> field <strong>of</strong> energy policy”, “undertake<br />
regular reviews <strong>of</strong> <strong>the</strong> longer-term prospects <strong>of</strong> <strong>the</strong> energy markets <strong>of</strong> <strong>the</strong><br />
world”, “review <strong>the</strong> energy situation in its national and international<br />
aspects”, and “undertake <strong>the</strong> responsibilities <strong>of</strong> <strong>the</strong> former Oil Committee<br />
under <strong>the</strong> Recommendation <strong>of</strong> <strong>the</strong> Council <strong>of</strong> 29th June, 1971, on Oil<br />
Stockpiling and <strong>the</strong> Decision <strong>of</strong> <strong>the</strong> Council <strong>of</strong> 14th November, 1972, on<br />
Emergency Plans and Measures and Apportionment <strong>of</strong> Oil Supplies in an<br />
Emergency in <strong>the</strong> OECD European Area”. <strong>The</strong> Committee was expected to<br />
oversee <strong>the</strong> o<strong>the</strong>r energy acts <strong>of</strong> <strong>the</strong> OECD which were <strong>the</strong>n still in effect, for<br />
none had been abrogated by virtue <strong>of</strong> <strong>the</strong> establishment <strong>of</strong> <strong>the</strong> Agency, and<br />
indeed none was abrogated by <strong>the</strong> Council until 1992.<br />
During its period <strong>of</strong> activity <strong>the</strong> Committee performed useful work as<br />
a forum for <strong>the</strong> non-Members <strong>of</strong> <strong>the</strong> <strong>IEA</strong>. On a number <strong>of</strong> occasions France<br />
and <strong>the</strong> o<strong>the</strong>r non-Members <strong>of</strong> <strong>the</strong> <strong>IEA</strong> made important presentations on<br />
energy developments in <strong>the</strong>ir own countries; and all were kept<br />
systematically informed by <strong>the</strong> Combined Energy Staff <strong>of</strong> <strong>the</strong> work <strong>of</strong> <strong>the</strong><br />
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Agency and were provided with an opportunity to put questions to <strong>the</strong><br />
Executive Director and o<strong>the</strong>r senior members <strong>of</strong> <strong>the</strong> Staff.<br />
<strong>The</strong> Committee for Energy Policy met once or twice a year during its<br />
period <strong>of</strong> activity from 1975 until <strong>the</strong> early 1990s when its meetings no<br />
longer seemed necessary, thanks to <strong>the</strong> accession <strong>of</strong> Finland and France as<br />
<strong>IEA</strong> Members. As <strong>the</strong> number <strong>of</strong> OECD Members participating in <strong>the</strong><br />
Agency increased over <strong>the</strong> years, <strong>the</strong> practical utility <strong>of</strong> <strong>the</strong> Committee<br />
diminished. It has not met at all in <strong>the</strong> period 1991-<strong>1994</strong> to <strong>the</strong> time <strong>of</strong> this<br />
writing, but <strong>of</strong> course still exists on <strong>the</strong> books <strong>of</strong> OECD. Its mandate<br />
extends to 28 April 1995, by which time it will be necessary to review <strong>the</strong><br />
question <strong>of</strong> extending <strong>the</strong> life <strong>of</strong> <strong>the</strong> Committee, unless <strong>the</strong> Committee<br />
should be terminated at an earlier date [See <strong>the</strong> Budget Committee’s<br />
recommendation that this be considered [<strong>IEA</strong>/BC(93)7, Item 2(v)].<br />
In <strong>the</strong> summer <strong>of</strong> 1992, <strong>the</strong> OECD Secretariat undertook a review <strong>of</strong><br />
possibly obsolete Council Acts in order to consider which ones might be<br />
retained for inclusion in a collection <strong>of</strong> viable Acts and which ones might be<br />
abrogated as obsolete. <strong>The</strong> Combined Energy Staff was requested to review<br />
<strong>the</strong> historic energy Acts dating as far back as 1962, including <strong>the</strong> Oil<br />
Apportionment Decision, <strong>the</strong> Oil Stockpiling Recommendation mentioned in<br />
<strong>the</strong> Energy Policy Committee mandate described above, and seven o<strong>the</strong>r<br />
Council acts dealing with a variety <strong>of</strong> energy subjects. <strong>The</strong> Staff analyzed<br />
each <strong>of</strong> those Acts and recommended that <strong>the</strong>y could all be abrogated as<br />
supplanted by <strong>IEA</strong> instruments, as outdated or as unnecessary. <strong>The</strong> Staff<br />
recommendations [Set forth in <strong>IEA</strong>/GB/RD(92)125.3] were noted by <strong>the</strong><br />
Governing Board on 15 September 1992 [See <strong>IEA</strong>/GB(92)36, Item 6(b)].<br />
<strong>The</strong> Council Acts in question were <strong>the</strong>n abrogated by <strong>the</strong> Council on<br />
10 November 1992. As a result <strong>of</strong> this action, <strong>the</strong> only remaining substantive<br />
energy actions <strong>of</strong> <strong>the</strong> OECD Council were those pertaining to <strong>the</strong><br />
Nuclear Energy Agency. All o<strong>the</strong>r general energy legislation was <strong>the</strong>n<br />
ga<strong>the</strong>red under <strong>the</strong> responsibility <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, and <strong>the</strong> corresponding<br />
Secretariat work was concentrated in <strong>the</strong> Combined Energy Staff under <strong>the</strong><br />
leadership <strong>of</strong> <strong>the</strong> Executive Director.<br />
E. <strong>The</strong> Executive Director<br />
1. Functions<br />
<strong>The</strong> constituent instruments <strong>of</strong> most international organizations make only<br />
a few specific references to <strong>the</strong> functions <strong>of</strong> <strong>the</strong> executive head. Most <strong>of</strong> <strong>the</strong><br />
254
principal functions <strong>of</strong> that <strong>of</strong>fice are “inherent powers” derived by inference<br />
from <strong>the</strong> designation <strong>of</strong> <strong>the</strong> executive head, whose title may be “Executive<br />
Director” (as for <strong>the</strong> <strong>IEA</strong>), “Secretary-General” (as for <strong>the</strong> U.N. and <strong>the</strong><br />
OECD) or “Director General” (as for <strong>the</strong> General Agreement on Tariffs and<br />
Trade (GATT) and many U.N. Specialized Agencies). This is also <strong>the</strong> case<br />
<strong>of</strong> <strong>the</strong> <strong>IEA</strong>, for which no specific definition <strong>of</strong> <strong>the</strong> Executive Director’s<br />
functions is found in <strong>the</strong> formal texts.<br />
<strong>The</strong>re was no attempt in ei<strong>the</strong>r <strong>the</strong> I.E.P. Agreement or <strong>the</strong> Council<br />
Decision to define <strong>the</strong> functions <strong>of</strong> <strong>the</strong> Executive Director, but <strong>the</strong> founders’<br />
intention to create a mainline public international organization executive<br />
head with broad powers in <strong>the</strong> established pattern was clear. A number <strong>of</strong><br />
important Secretariat functions were foreseen in specific or general terms<br />
[See Sections A and B above], including those specified in <strong>the</strong> I.E.P.<br />
Agreement and those conferred by <strong>the</strong> Governing Board under Article 60,<br />
which refers not only to functions assigned to <strong>the</strong> Secretariat in <strong>the</strong><br />
Agreement (which formally includes <strong>the</strong> Executive Director), but also to<br />
“any o<strong>the</strong>r function assigned to it by <strong>the</strong> Governing Board”. For <strong>the</strong><br />
Executive Director as such <strong>the</strong> only specific function detailed in <strong>the</strong><br />
Agreement is found in Article 64.3, which states that<br />
<strong>The</strong> Executive Director shall, in accordance with <strong>the</strong> financial<br />
regulations adopted by <strong>the</strong> Governing Board and not later than<br />
1st October <strong>of</strong> each year, submit to <strong>the</strong> Governing Board a draft<br />
budget including personnel requirements.<br />
Broader functions are derived from <strong>the</strong> provision that <strong>the</strong> Executive Director<br />
is part <strong>of</strong> <strong>the</strong> “Secretariat” [Article 59.1] which has specific and general<br />
powers described above in Section B and in this Section. <strong>The</strong> principal<br />
function <strong>of</strong> <strong>the</strong> Executive Director under those provisions is to take part in<br />
<strong>the</strong> work <strong>of</strong> <strong>the</strong> Secretariat and to direct that work, whe<strong>the</strong>r it is specified in<br />
<strong>the</strong> I.E.P. Agreement or assigned to <strong>the</strong> Secretariat by <strong>the</strong> Governing Board.<br />
It hardly needs mentioning that such functions carry political as well as<br />
operational and administrative responsibilities. Surely one <strong>of</strong> <strong>the</strong> most<br />
important functions <strong>of</strong> <strong>the</strong> Executive Director is to direct <strong>the</strong> making <strong>of</strong> <strong>the</strong><br />
Secretariat “findings” which trigger <strong>the</strong> <strong>IEA</strong> Emergency Sharing System<br />
under Articles 19.1, <strong>20</strong>.1 and 21.1 <strong>of</strong> <strong>the</strong> I.E.P Agreement; this function is<br />
one <strong>of</strong> <strong>the</strong> most innovative features <strong>of</strong> <strong>the</strong> <strong>IEA</strong> system because it delegates<br />
unprecedented power to <strong>the</strong> Executive Director.<br />
Overall, <strong>the</strong> Executive Director’s function is to provide leadership and<br />
direction on energy policy, on <strong>IEA</strong> programme activities and on institutional<br />
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development and operations. Within <strong>the</strong> general mandate <strong>of</strong> <strong>the</strong> Agency,<br />
<strong>the</strong> Executive Director is directly and personally engaged, with support<br />
from o<strong>the</strong>rs in <strong>the</strong> Secretariat, in developing energy policy initiatives on a<br />
broad range <strong>of</strong> energy problems <strong>of</strong> interest to Member countries, in advising<br />
and when necessary in mediating to help Members arrive at <strong>the</strong> most<br />
propitious policy conclusions. <strong>The</strong> Executive Director’s initiatives have<br />
encompassed most <strong>of</strong> <strong>the</strong> major developments in <strong>the</strong> Agency over <strong>the</strong> years,<br />
including <strong>the</strong> refinement <strong>of</strong> <strong>the</strong> oil Emergency Sharing System and <strong>the</strong><br />
CERM arrangements, <strong>the</strong> testing <strong>of</strong> <strong>the</strong> response systems, and <strong>the</strong> specific<br />
responses to <strong>the</strong> 1979-1980 crisis and to <strong>the</strong> Gulf Crisis in 1990-1991. <strong>The</strong><br />
Executive Director’s initiatives have also extended to a wide range <strong>of</strong> energy<br />
policy activities, involving: <strong>the</strong> encouragement <strong>of</strong> a broad mix <strong>of</strong> energy<br />
policies and participation in policy adjustment activities; <strong>the</strong> development <strong>of</strong><br />
long-term energy policies, <strong>the</strong> energy country reviews in <strong>IEA</strong>, <strong>the</strong> use <strong>of</strong><br />
coal, natural gas and nuclear as well as non-conventional sources <strong>of</strong> energy,<br />
<strong>the</strong> support <strong>of</strong> energy conservation and efficiency, <strong>of</strong> R & D policies and cooperative<br />
arrangements, <strong>of</strong> energy and <strong>the</strong> environment; and participation<br />
in <strong>the</strong> Agency’s work on oil markets, on energy publications, information<br />
systems and services. Currently <strong>the</strong> Executive Director is personally<br />
engaged as well in policy initiatives being drawn from <strong>the</strong> 1993 Ministerial<br />
meeting <strong>of</strong> <strong>the</strong> Governing Board and from <strong>the</strong> 1992 reassessment <strong>of</strong> world<br />
energy conditions and <strong>of</strong> <strong>the</strong> future role <strong>of</strong> <strong>IEA</strong> in <strong>the</strong> new energy<br />
environment. <strong>The</strong>se initiatives cover <strong>the</strong> entire range <strong>of</strong> <strong>IEA</strong> activities; in<br />
<strong>the</strong> early 1990s <strong>the</strong>y have placed renewed emphasis on energy and <strong>the</strong><br />
environment and on relations with non-Member countries, particularly<br />
those in Central and Eastern Europe, Asia and Latin America.<br />
<strong>The</strong>se efforts merge with <strong>the</strong> Executive Director’s function <strong>of</strong><br />
providing programme leadership, which involves <strong>the</strong> transformation <strong>of</strong><br />
policy concepts into detailed activities <strong>of</strong> <strong>the</strong> Agency, its organs and <strong>the</strong><br />
Secretariat to bring about <strong>the</strong> realization <strong>of</strong> <strong>the</strong> policy objectives. <strong>The</strong><br />
Executive Director’s work is heavily committed to those transformations, to<br />
formulating <strong>the</strong>m in a coherent, realistic and politically acceptable fashion.<br />
<strong>The</strong> result <strong>of</strong> this process each year is <strong>the</strong> establishment <strong>of</strong> <strong>the</strong> draft<br />
Programme <strong>of</strong> Work <strong>of</strong> <strong>the</strong> Agency which contains <strong>the</strong> systematic<br />
description <strong>of</strong> those activities and indicates <strong>the</strong> estimated Staff resource<br />
levels as well as <strong>the</strong> corresponding budgetary requirements [See Chapter<br />
VII, Section B below]. This part <strong>of</strong> <strong>the</strong> Executive Director’s functions<br />
responds to <strong>the</strong> Article 64.3 text quoted above. When approved by <strong>the</strong><br />
Governing Board, <strong>the</strong> Programmes <strong>of</strong> Work contain <strong>the</strong> Board’s instructions<br />
concerning <strong>the</strong> work to be performed by <strong>the</strong> Secretariat under <strong>the</strong><br />
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esponsibility <strong>of</strong> <strong>the</strong> Executive Director in <strong>the</strong> course <strong>of</strong> <strong>the</strong> year, and <strong>the</strong><br />
Budgets contain <strong>the</strong> corresponding authorizations for <strong>the</strong> receipt and<br />
expenditure <strong>of</strong> income <strong>of</strong> <strong>the</strong> Agency and for related financial and personnel<br />
arrangements for <strong>the</strong> same period.<br />
<strong>The</strong> Executive Director provides institutional leadership both within<br />
<strong>the</strong> Agency and to <strong>the</strong> outside world. Part <strong>of</strong> that function is to develop and<br />
maintain effective relations with Member governments, with <strong>the</strong>ir Ministers<br />
responsible for energy, with Governing Board members, with Delegations in<br />
Paris and with high level administration and legislative authorities in<br />
capitals. This directly engages <strong>the</strong> Executive Director in diplomatic work<br />
on sensitive issues with <strong>the</strong>se public authorities. Ano<strong>the</strong>r part <strong>of</strong> <strong>the</strong><br />
Executive Director’s institutional leadership is <strong>the</strong> cultivation <strong>of</strong> appropriate<br />
relations with energy industry representatives, particularly in <strong>the</strong> petroleum<br />
and coal sectors which are represented in <strong>IEA</strong> industry consultative bodies<br />
[See Chapter V, Section A-17(d) and (e) above], and with high <strong>of</strong>ficials <strong>of</strong><br />
<strong>the</strong> OECD and o<strong>the</strong>r international organizations active in areas <strong>of</strong> <strong>IEA</strong><br />
interest.<br />
Those representational functions are complemented by <strong>the</strong> Executive<br />
Director’s public relations functions, principally <strong>the</strong> presentation <strong>of</strong> <strong>IEA</strong><br />
policies, views, and developments to a wider audience by means <strong>of</strong> public<br />
appearances. <strong>The</strong> Executive Director regularly participates in press<br />
interviews and conferences on television and radio, as well as in energy<br />
conferences and o<strong>the</strong>r events sponsored by <strong>the</strong> Agency or convened under<br />
<strong>the</strong> auspices <strong>of</strong> o<strong>the</strong>r institutions active in <strong>the</strong> energy field. <strong>The</strong> Executive<br />
Director regularly visits Member countries for public relations purposes.<br />
Such public appearances provide opportunities to promote a better<br />
understanding <strong>of</strong> <strong>the</strong> <strong>IEA</strong> and <strong>of</strong> <strong>the</strong> policies pursued and endorsed by<br />
Member countries. <strong>The</strong> Executive Director has come to embody <strong>the</strong> Agency<br />
overall, to be its principal and most authoritative spokesperson, and to be<br />
recognized as one <strong>of</strong> <strong>the</strong> leading world authorities on international cooperation<br />
in <strong>the</strong> field <strong>of</strong> energy. <strong>The</strong> Executive Director’s leadership has<br />
consequently had a significant impact on <strong>the</strong> development <strong>of</strong> energy policies<br />
both in Member countries as well as in <strong>the</strong> Agency itself.<br />
<strong>The</strong> internal management and operation <strong>of</strong> <strong>the</strong> Agency also falls<br />
within <strong>the</strong> Executive Director’s principal responsibilities. This includes<br />
daily management functions, and <strong>the</strong> making <strong>of</strong> those personnel policy and<br />
hiring decisions which in <strong>the</strong> end determine <strong>the</strong> composition <strong>of</strong> <strong>the</strong><br />
Secretariat and <strong>the</strong> quality <strong>of</strong> its work. Responsibility extends as well to <strong>the</strong><br />
organization <strong>of</strong> <strong>IEA</strong> meetings and conferences, to <strong>the</strong> preparation <strong>of</strong><br />
agendas and meeting documents, to <strong>the</strong> assistance to Delegations in <strong>the</strong><br />
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course <strong>of</strong> meetings, to <strong>the</strong> provision <strong>of</strong> advice and to <strong>the</strong> co-ordination <strong>of</strong> <strong>the</strong><br />
work <strong>of</strong> <strong>the</strong> various Standing Groups and Committees and Offices <strong>of</strong> <strong>the</strong><br />
Secretariat. <strong>The</strong> Executive Director also serves as <strong>the</strong> <strong>of</strong>ficial depositary <strong>of</strong><br />
<strong>the</strong> <strong>IEA</strong> R & D Implementing Agreements (upon designation in each<br />
Agreement by <strong>the</strong> Contracting Parties) and carries out for those Agreements<br />
<strong>the</strong> depositary functions provided in Article 77 <strong>of</strong> <strong>the</strong> Vienna Convention on<br />
<strong>the</strong> Law <strong>of</strong> Treaties. <strong>The</strong> Executive Director is thus responsible for <strong>the</strong><br />
Secretariat functions which are associated generally with international<br />
organizations, except that most <strong>of</strong> <strong>the</strong> routine personnel, finance and o<strong>the</strong>r<br />
general service functions for <strong>the</strong> <strong>IEA</strong> are carried out by <strong>the</strong> OECD<br />
Secretariat on behalf <strong>of</strong> <strong>the</strong> <strong>IEA</strong> and not by <strong>the</strong> <strong>IEA</strong> Secretariat itself.<br />
From time to time <strong>the</strong> Governing Board also confers upon <strong>the</strong> Executive<br />
Director specific tasks which complement <strong>the</strong> functions provided in <strong>the</strong> I.E.P.<br />
Agreement and <strong>the</strong> “inherent” functions <strong>of</strong> <strong>the</strong> <strong>of</strong>fice. Some particular<br />
functions assigned to <strong>the</strong> Executive Director have been <strong>the</strong> following:<br />
■<br />
■<br />
■<br />
In <strong>the</strong> 1990-1991 Gulf Crisis, preparation for Governing Board<br />
actions, including monitoring and preparation <strong>of</strong> steps and instruments<br />
for implementation <strong>of</strong> co-ordinated measures [<strong>IEA</strong>/GB(90)27,<br />
Annex, paragraph (c)]; and <strong>the</strong> dissemination to <strong>the</strong> public <strong>of</strong><br />
information on <strong>the</strong> oil market developments “in order to improve <strong>the</strong><br />
understanding <strong>of</strong> <strong>the</strong> oil supply and demand situation, <strong>the</strong>reby<br />
reducing public apprehension and misunderstanding” [<strong>IEA</strong>/<br />
GB(90)39, Item 2(c)].<br />
In <strong>the</strong> 1990-1991 Gulf Crisis, <strong>the</strong> responsibility for activating <strong>the</strong> Coordinated<br />
Energy Emergency Response Contingency Plan, committing<br />
Member countries through a combination <strong>of</strong> stockdraw, demand<br />
restraint and o<strong>the</strong>r measures to make available to <strong>the</strong> market<br />
2.5 million barrels <strong>of</strong> oil per day [<strong>IEA</strong>/GB(91)1, Annex, paragraph<br />
(c)]; (<strong>the</strong> Executive Director did in fact activate that plan on<br />
17 January 1991; on 28 January 1991 <strong>the</strong> Board continued <strong>the</strong> plan<br />
in effect and requested <strong>the</strong> Secretariat and two Standing Groups to<br />
“continue to monitor closely <strong>the</strong> oil market situation and <strong>the</strong><br />
implementation <strong>of</strong> <strong>the</strong> contingency plan” [<strong>IEA</strong>/GB(91)3, Annex<br />
paragraphs (a) and (d)]; <strong>the</strong> Board terminated <strong>the</strong> plan on 6 March<br />
1991 [<strong>IEA</strong>/GB(91)19, Item 3(d)].<br />
In <strong>the</strong> event <strong>of</strong> an oil supply disruption, <strong>the</strong> responsibility for<br />
initiating consultations among Member countries and for activation <strong>of</strong><br />
<strong>the</strong> submission <strong>of</strong> Questionnaires A and B for <strong>the</strong> receipt and use <strong>of</strong><br />
oil emergency data [Decision on Preparation for Future Supply<br />
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■<br />
■<br />
■<br />
■<br />
■<br />
■<br />
■<br />
Disruptions, <strong>IEA</strong>/GB(81)86, Annex I]; (<strong>the</strong> Executive Director<br />
activated <strong>the</strong> Questionnaires at <strong>the</strong> outset <strong>of</strong> <strong>the</strong> Gulf Crisis in 1990<br />
[<strong>IEA</strong>/GB(90)24, Annex paragraph (g)].<br />
In 1981, <strong>the</strong> Chairmanship <strong>of</strong> <strong>the</strong> High Level Ad Hoc Group on New<br />
<strong>IEA</strong> Actions [<strong>IEA</strong>/GB(81)10, Item 5].<br />
On <strong>the</strong> occasion <strong>of</strong> each request for membership in <strong>the</strong> <strong>IEA</strong>,<br />
responsibility for examining <strong>the</strong> terms and conditions <strong>of</strong> membership<br />
in <strong>the</strong> Agency with governments which had expressed interest in<br />
joining <strong>the</strong> <strong>IEA</strong> (two recent examples are France [<strong>IEA</strong>/GB(90)27,<br />
Item 5] and Finland [<strong>IEA</strong>/GB(90)32, Item 4]; that responsibility was<br />
also carried out in <strong>the</strong> earlier membership exercises).<br />
In 1992, providing <strong>the</strong> Governing Board with “a paper with<br />
conceptual and procedural propositions for participation by non-<br />
Member countries in <strong>the</strong> activities <strong>of</strong> <strong>the</strong> Agency” [<strong>IEA</strong>/GB(92)17,<br />
Item 3(b)].<br />
<strong>The</strong> authority to publish documents under <strong>the</strong> authority <strong>of</strong> <strong>the</strong><br />
Executive Director at <strong>the</strong> expense <strong>of</strong> <strong>the</strong> Agency [See recent examples<br />
<strong>IEA</strong>/GB(92)17, Item 6(a)(ii); <strong>IEA</strong>/GB(89)54, Item 4(a)].<br />
<strong>The</strong> engagement, on behalf <strong>of</strong> <strong>the</strong> Agency, in various diplomatic and<br />
programme activities with a number <strong>of</strong> non-Member countries [See<br />
for example <strong>IEA</strong>/GB(91)79, Item 5].<br />
In 1991, providing <strong>the</strong> Board with a paper containing a suggestion as<br />
to how <strong>the</strong> <strong>IEA</strong> and <strong>the</strong> OECD might provide institutional support to<br />
<strong>the</strong> European Energy Charter; [See <strong>IEA</strong>/GB(91)65, Item 4(c)].<br />
On <strong>the</strong> occasion <strong>of</strong> each Ministerial Level meeting <strong>of</strong> <strong>the</strong> Governing<br />
Board, preparation and revision <strong>of</strong> policy documents for <strong>the</strong> meetings<br />
<strong>of</strong> <strong>the</strong> Governing Board [See for example <strong>IEA</strong>/GB(93)26, Items 4-7<br />
and <strong>IEA</strong>/GB(93)35, Items 3 and 4].<br />
<strong>The</strong> importance <strong>of</strong> <strong>the</strong> Executive Director’s daily contribution to <strong>the</strong> overall<br />
effectiveness and standing <strong>of</strong> <strong>the</strong> <strong>IEA</strong> cannot be overestimated.<br />
2. Appointment<br />
<strong>The</strong>re are two formal texts which contain <strong>the</strong> rules for <strong>the</strong> Executive<br />
Director’s appointment, <strong>the</strong> I.E.P. Agreement and <strong>the</strong> OECD Council<br />
Decision. Article 59.2 <strong>of</strong> <strong>the</strong> I.E.P. Agreement provides simply that<br />
<strong>The</strong> Executive Director shall be appointed by <strong>the</strong> Governing<br />
Board.<br />
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<strong>The</strong> OECD Council Decision provides additional guidance in <strong>the</strong> following<br />
terms <strong>of</strong> Article 7(b):<br />
<strong>The</strong> Executive Director shall be appointed by <strong>the</strong> Governing<br />
Board on <strong>the</strong> proposal or with concurrence <strong>of</strong> <strong>the</strong> Secretary-<br />
General.<br />
<strong>The</strong> OECD Council formulation was used in <strong>the</strong> appointments both <strong>of</strong> Dr.<br />
Ulf Lantzke at <strong>the</strong> first meeting <strong>of</strong> <strong>the</strong> Governing Board on 18 November<br />
<strong>1974</strong> [<strong>IEA</strong>/GB(74)9(1st Revision), Item 2] upon <strong>the</strong> proposal <strong>of</strong> <strong>the</strong><br />
Secretary-General, and <strong>of</strong> Mrs. Helga Steeg on 15 May 1984<br />
[<strong>IEA</strong>/GB(84)16, Item 3(a)], upon <strong>the</strong> proposal <strong>of</strong> <strong>the</strong> Chairman <strong>of</strong> <strong>the</strong><br />
Governing Board and with <strong>the</strong> concurrence <strong>of</strong> <strong>the</strong> Secretary-General. In <strong>the</strong><br />
interim between <strong>the</strong> departure <strong>of</strong> Dr. Lantzke and <strong>the</strong> arrival <strong>of</strong> Mrs. Steeg,<br />
<strong>the</strong> functions <strong>of</strong> <strong>the</strong> Executive Director were carried out by <strong>the</strong> Deputy, J.<br />
Wallace Hopkins, “on an Acting basis” [<strong>IEA</strong>/GB(84)15, Item 2(d);<br />
<strong>IEA</strong>/GB(84)16, Item 3(d)] which did not constitute a formal appointment<br />
as Executive Director (for that, <strong>the</strong> participation <strong>of</strong> <strong>the</strong> Secretary-General<br />
would have been required under Article 7 <strong>of</strong> <strong>the</strong> Council Decision quoted<br />
above).<br />
In <strong>the</strong> case <strong>of</strong> Dr. Lantzke, <strong>the</strong> appointment was made with<br />
immediate effect, and he accordingly entered <strong>of</strong>ficially upon his duties in<br />
<strong>the</strong> course <strong>of</strong> <strong>the</strong> meeting in which he was appointed. Since Mrs. Steeg was<br />
not immediately available at <strong>the</strong> time <strong>of</strong> her appointment to take up her<br />
duties in Paris, <strong>the</strong> Board decided that “<strong>The</strong> date on which Frau Steeg will<br />
take up her duties remains to be decided in discussions between her and <strong>the</strong><br />
Chairman <strong>of</strong> <strong>the</strong> Governing Board” [<strong>IEA</strong>/GB(84)16, Item 3(a)]. <strong>The</strong> date<br />
she and <strong>the</strong> Chairman decided upon was 1 July 1984. By letter dated<br />
15 June, <strong>the</strong> Secretary-General confirmed her appointment as Co-ordinator<br />
<strong>of</strong> Energy Policies for <strong>the</strong> Organisation as a whole. She was welcomed as<br />
Executive Director by <strong>the</strong> Governing Board at its next meeting on 11 July<br />
1984 [<strong>IEA</strong>/GB(84)27, Item 1(b)].<br />
<strong>The</strong> procedures for developing proposals concerning candidates for<br />
<strong>the</strong> Executive Director post were different in <strong>the</strong> two cases. Dr. Lantzke had<br />
been a member <strong>of</strong> <strong>the</strong> German Delegation to <strong>the</strong> ECG which negotiated <strong>the</strong><br />
I.E.P. Agreement during <strong>1974</strong>. In <strong>the</strong> course <strong>of</strong> <strong>the</strong> ECG period he was<br />
appointed Special Counsellor to <strong>the</strong> OECD Secretary-General on Energy<br />
Questions and Director <strong>of</strong> <strong>the</strong> Energy Directorate <strong>of</strong> <strong>the</strong> Organisation.<br />
<strong>The</strong>reafter he represented <strong>the</strong> OECD in <strong>the</strong> ECG in that capacity. <strong>The</strong>refore<br />
during <strong>the</strong> consultations on <strong>the</strong> appointment <strong>of</strong> <strong>the</strong> first Executive Director,<br />
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Dr. Lantzke was exceptionally well-known personally as a leading and<br />
experienced energy specialist (1) to <strong>the</strong> ECG delegations in Brussels and (2)<br />
to <strong>the</strong> Governing Board members who were drawn in significant numbers<br />
from <strong>the</strong> ECG. In that process observers soon took it for granted that Dr.<br />
Lantzke would be appointed Executive Director.<br />
In <strong>the</strong> spring <strong>of</strong> 1984, when Dr. Lantzke approached <strong>the</strong> time when<br />
he wished to relinquish his responsibilities as Executive Director, <strong>the</strong><br />
Governing Board Chairman, Alan Woods <strong>of</strong> Australia, began an extensive<br />
process <strong>of</strong> consultation to find <strong>the</strong> best possible successor. In view <strong>of</strong> <strong>the</strong><br />
geographical distances involved, Chairman Woods invited Dr. Lantzke to<br />
assist him in <strong>the</strong> consultations. Dr. Lantzke and <strong>the</strong> Chairman agreed that<br />
<strong>the</strong> consultations would be guided by <strong>the</strong> following considerations:<br />
identification <strong>of</strong> possible individuals based on qualifications<br />
and experience, availability for potential draft and likelihood <strong>of</strong><br />
consensus being reached on <strong>the</strong> person in question.<br />
A number <strong>of</strong> highly qualified persons were considered for appointment.<br />
Following extensive interviews and consultations with <strong>the</strong> governments <strong>of</strong> all<br />
<strong>IEA</strong> Member countries as well as with <strong>the</strong> Commission <strong>of</strong> <strong>the</strong> European<br />
Communities, in <strong>the</strong> Chairman’s view one person emerged as best meeting <strong>the</strong><br />
criteria summarized above. <strong>The</strong> Chairman expressed confidence that this<br />
person would bring to her work <strong>the</strong> standing and experience in international<br />
affairs which are necessary for acceptance as head <strong>of</strong> <strong>the</strong> Secretariat and that<br />
her competence would be recognized by <strong>the</strong> international energy community.<br />
<strong>The</strong> Chairman accordingly proposed <strong>the</strong> appointment <strong>of</strong> Mrs. Helga Steeg <strong>of</strong><br />
Germany as Executive Director, and she was promptly appointed on 15 May<br />
1984 at a special meeting <strong>of</strong> <strong>the</strong> Governing Board convened for that purpose.<br />
[See Dr. Lantzke’s report to <strong>the</strong> Governing Board (OLC File, Governing Board<br />
Meeting, 15 May 1984); trade press coverage <strong>of</strong> <strong>the</strong> foregoing process includes<br />
Platt’s Oilgram News issues dated 27 December 1983 and 27 January,<br />
22 February, 8 March, 15 March, 4 April, 6 April and 16 May 1984].<br />
3. Voting Rule for Appointments<br />
Although <strong>the</strong> Governing Board has not found it necessary to discuss <strong>the</strong><br />
applicable voting rule for decisions appointing <strong>the</strong> Executive Director<br />
(because <strong>the</strong> decisions in <strong>the</strong> cases <strong>of</strong> both Dr. Lantzke and Mrs. Steeg were<br />
made by consensus), it is clear that under <strong>the</strong> I.E.P. Agreement <strong>the</strong> required<br />
vote is an IEP “majority” as provided in Article 62.3, i.e. <strong>the</strong> affirmative<br />
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vote <strong>of</strong> at least half <strong>of</strong> <strong>the</strong> Members voting, with at least 60 per cent <strong>of</strong> <strong>the</strong><br />
“combined voting weights” (CVW) [See Chapter V, Section A-13 above].<br />
This conclusion derives from I.E.P. Article 59.1 which provides for <strong>the</strong><br />
“Secretariat” to be composed <strong>of</strong> <strong>the</strong> Executive Director and <strong>the</strong> Staff,<br />
toge<strong>the</strong>r with Article 59.4 which states broadly that:<br />
<strong>The</strong> Governing Board, acting by majority, shall take all<br />
decisions necessary for <strong>the</strong> establishment and <strong>the</strong> functioning <strong>of</strong><br />
<strong>the</strong> Secretariat [Emphasis added].<br />
Voting on <strong>the</strong> appointment <strong>of</strong> <strong>the</strong> Executive Director could also be<br />
characterized as a “management” question under I.E.P. Agreement Article<br />
61.1(a) which provides for such decisions to be decided “by majority”. If<br />
questions <strong>of</strong> formal voting should arise on <strong>the</strong> appointment <strong>of</strong> <strong>the</strong> Executive<br />
Director, <strong>the</strong> decisions are clearly to be taken pursuant not to <strong>the</strong> OECD rule<br />
requiring unanimity, but to <strong>the</strong> <strong>IEA</strong> rule <strong>of</strong> majority voting as set forth in <strong>the</strong><br />
I.E.P. Agreement, and <strong>the</strong>y would never<strong>the</strong>less be expected to be taken by<br />
consensus in accordance with <strong>the</strong> tradition <strong>of</strong> <strong>the</strong> Governing Board.<br />
4. Term <strong>of</strong> Office<br />
<strong>The</strong>re is no specific provision in ei<strong>the</strong>r <strong>the</strong> I.E.P. Agreement or <strong>the</strong> Council<br />
Decision fixing <strong>the</strong> Executive Director’s term <strong>of</strong> <strong>of</strong>fice or providing for <strong>the</strong><br />
term to be fixed. Nor does <strong>the</strong> Governing Board’s policy concerning “in<br />
principle” <strong>the</strong> normal three year duration <strong>of</strong> staff appointments apply to <strong>the</strong><br />
Executive Director [See Section G below]. <strong>The</strong> term <strong>of</strong> <strong>of</strong>fice thus remains<br />
within <strong>the</strong> discretion <strong>of</strong> <strong>the</strong> Governing Board, to be determined ei<strong>the</strong>r in <strong>the</strong><br />
appointment decisions at <strong>the</strong> outset or in separate decisions which could be<br />
taken at any time in <strong>the</strong> course <strong>of</strong> <strong>the</strong> Executive Director’s period <strong>of</strong> service<br />
[this derives from general powers on personnel questions contained in<br />
Article 59.4 <strong>of</strong> <strong>the</strong> I.E.P. Agreement]. Since an Executive Director appointed<br />
without a fixed term <strong>of</strong> <strong>of</strong>fice may be replaced at any time by <strong>the</strong> Governing<br />
Board’s appointment <strong>of</strong> a replacement Executive Director, <strong>the</strong> term <strong>of</strong> <strong>of</strong>fice<br />
may be characterized as “at <strong>the</strong> pleasure <strong>of</strong> <strong>the</strong> Governing Board”, and that<br />
characterization was made informally by Chairman Davignon at <strong>the</strong> time <strong>of</strong><br />
Dr. Lantzke’s appointment when <strong>the</strong> Chairman declined to submit a fixed<br />
period term <strong>of</strong> <strong>of</strong>fice proposal (for three years) to <strong>the</strong> Board. <strong>The</strong><br />
appointment decision as adopted is silent as to <strong>the</strong> term <strong>of</strong> <strong>of</strong>fice. Like Dr.<br />
Lantzke, Mrs. Steeg serves at <strong>the</strong> pleasure <strong>of</strong> <strong>the</strong> Governing Board under <strong>the</strong><br />
same type <strong>of</strong> appointment.<br />
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On only one occasion has <strong>the</strong> Board taken a decision to terminate <strong>the</strong><br />
functions <strong>of</strong> a person exercising <strong>the</strong> responsibilities <strong>of</strong> <strong>the</strong> executive head <strong>of</strong><br />
<strong>the</strong> Agency, and that was done in connection with <strong>the</strong> appointment <strong>of</strong> Mrs.<br />
Steeg on 15 May 1984, when <strong>the</strong> Governing Board concluded that “Until<br />
Frau Steeg takes up her duties, Mr. J. Wallace Hopkins will continue to<br />
carry out <strong>the</strong> responsibilities <strong>of</strong> <strong>the</strong> Executive Director on an Acting Basis”<br />
[<strong>IEA</strong>/GB(84)16, Item 3(d)]. This formulation provided for <strong>the</strong> termination<br />
<strong>of</strong> Mr. Hopkins’ service in that capacity when Mrs. Steeg would later join<br />
<strong>the</strong> Agency on 1 July 1984. Of course her appointment would have had<br />
that formal effect even if <strong>the</strong> decision had not provided so specifically.<br />
<strong>The</strong> Executive Director’s term <strong>of</strong> <strong>of</strong>fice is also subject to <strong>the</strong> right <strong>of</strong><br />
<strong>the</strong> serving Executive Director to submit a letter <strong>of</strong> resignation at any time<br />
to <strong>the</strong> Governing Board, although again no specific provision is made on<br />
that subject in <strong>the</strong> two <strong>IEA</strong> formal texts. Dr. Lantzke exercised <strong>the</strong> right <strong>of</strong><br />
resignation in his letter <strong>of</strong> 27 March 1984 [<strong>IEA</strong>/ED/84.68] addressed to<br />
Governing Board Chairman Alan Woods:<br />
As we have discussed, I hereby resign as Executive Director <strong>of</strong><br />
<strong>the</strong> International Energy Agency, effective 31 March, 1984.<br />
In its meeting on 28 March 1984, <strong>the</strong> Governing Board in turn accepted Dr.<br />
Lantzke’s resignation as set forth in that letter. In doing so <strong>the</strong> Board also<br />
“expressed its deep gratitude to Dr. Lantzke for his excellent work as Executive<br />
Director since <strong>the</strong> International Energy Agency was founded in <strong>1974</strong>”, and<br />
“agreed that <strong>the</strong> Deputy Executive Director, Mr. J. Wallace Hopkins take over <strong>the</strong><br />
Executive Director’s functions on an Acting basis” [<strong>IEA</strong>/GB(84)15, Item 2(d)].<br />
<strong>The</strong> Executive Director serves <strong>the</strong> <strong>IEA</strong> indefinitely until resignation,<br />
replacement or o<strong>the</strong>r decision <strong>of</strong> <strong>the</strong> Governing Board, although <strong>the</strong> Executive<br />
Director also serves <strong>the</strong> OECD under separate arrangements which may<br />
include different durations. It will be recalled that <strong>the</strong> two Executive Directors<br />
who have served <strong>the</strong> <strong>IEA</strong> to date have also served <strong>the</strong> OECD as Co-ordinator<br />
<strong>of</strong> Energy Policies for <strong>the</strong> Organisation as a whole (for Dr. Lantzke this<br />
position was initially called Special Counsellor to <strong>the</strong> Secretary-General on<br />
Energy Questions and it was set for a renewable fixed period <strong>of</strong> two years).<br />
<strong>The</strong> Secretary-General’s appointment <strong>of</strong> Mrs. Steeg as Co-ordinator <strong>of</strong> Energy<br />
Policies for <strong>the</strong> Organisation as a whole was made without reference to a<br />
period <strong>of</strong> time, and she thus serves for an indefinite period [See letter van<br />
Lennup/Steeg, 15 June 1984]. However, <strong>the</strong>se OECD appointments are<br />
made quite independently <strong>of</strong> <strong>the</strong> Governing Board which retains for <strong>the</strong> <strong>IEA</strong><br />
full control over <strong>the</strong> term <strong>of</strong> <strong>of</strong>fice <strong>of</strong> <strong>the</strong> incumbent Executive Director.<br />
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5. Conditions <strong>of</strong> Service<br />
In arrangement with <strong>the</strong> Secretary-General, <strong>the</strong> Executive Director’s rank in<br />
<strong>the</strong> OECD is equivalent to that <strong>of</strong> Deputy Secretary-General <strong>of</strong> <strong>the</strong><br />
Organisation, with terms and conditions <strong>of</strong> appointment corresponding to<br />
that rank [confirmed by letter van Lennup/Lantzke, 17 July 1979, copy in<br />
<strong>IEA</strong> Legal Counsel file]. On 28 July 1975, <strong>the</strong> Governing Board fixed <strong>the</strong><br />
Executive Director’s salary, allowances and benefits, with reference to those<br />
applicable to Deputy Secretaries-General <strong>of</strong> <strong>the</strong> OECD, and it allocated <strong>the</strong><br />
costs one-third to <strong>the</strong> OECD under Part I <strong>of</strong> <strong>the</strong> Budget and two-thirds to<br />
<strong>the</strong> <strong>IEA</strong> under Part II <strong>of</strong> <strong>the</strong> OECD Budget (but beginning with <strong>the</strong> <strong>1994</strong><br />
Budget none <strong>of</strong> <strong>the</strong> <strong>IEA</strong> funding appears in Part I). <strong>The</strong>se provisions were<br />
adopted in detailed terms in a Confidential Annex to <strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong><br />
Governing Board for its meeting <strong>of</strong> that date. <strong>The</strong> Secretary-General<br />
concurred in those arrangements. Copies <strong>of</strong> <strong>the</strong> Confidential Annex were<br />
not distributed to Members, but were retained in <strong>the</strong> Office <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Legal<br />
Counsel where <strong>the</strong>y were made available to interested Delegations on<br />
request. No action <strong>of</strong> <strong>the</strong> OECD Council was necessary, and <strong>the</strong>re was no<br />
need to modify any <strong>of</strong> <strong>the</strong> OECD’s legislative texts to bring about <strong>the</strong>se<br />
results.<br />
In <strong>the</strong> case <strong>of</strong> Mrs. Steeg, essentially <strong>the</strong> same procedures were adopted<br />
in 1984; her compensation package corresponding to that <strong>of</strong> her predecessor,<br />
with <strong>the</strong> addition <strong>of</strong> representational assistance for housing costs. This<br />
decision <strong>of</strong> <strong>the</strong> Governing Board was, like <strong>the</strong> 1975 decision for Dr. Lantzke,<br />
attached as a Confidential Annex to <strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong> Governing Board<br />
meeting, in this case <strong>the</strong> meeting <strong>of</strong> 15 May 1984. Again <strong>the</strong> Confidential<br />
Annex was held and made available to Delegations only upon request. Since<br />
that time <strong>the</strong> Confidential Annex has been amended only to bring <strong>the</strong><br />
representational allowance level into line with current requirements [See<br />
Note Scott/Head <strong>of</strong> Personnel, 9 April 1986, OLC EXD File].<br />
F. <strong>The</strong> Deputy Executive Director<br />
1. Functions<br />
<strong>The</strong> functions <strong>of</strong> <strong>the</strong> Deputy Executive Director, like those <strong>of</strong> <strong>the</strong> Executive<br />
Director, were not defined explicitly in <strong>the</strong> formal texts which established<br />
<strong>the</strong> Agency. Both <strong>the</strong> creation <strong>of</strong> <strong>the</strong> Deputy Executive Director post and<br />
<strong>the</strong> definition <strong>of</strong> <strong>the</strong> Deputy’s functions were undertaken directly by <strong>the</strong><br />
264
Governing Board. Serving naturally as <strong>the</strong> number two <strong>of</strong>ficial <strong>of</strong> <strong>the</strong><br />
Agency, <strong>the</strong> Deputy acts in <strong>the</strong> place <strong>of</strong> <strong>the</strong> Executive Director during<br />
periods <strong>of</strong> absence and assists <strong>the</strong> Executive Director in all <strong>of</strong> <strong>the</strong> functions<br />
<strong>of</strong> that <strong>of</strong>fice. <strong>The</strong> Deputy has responsibilities for <strong>the</strong> day-to-day<br />
management <strong>of</strong> <strong>the</strong> Secretariat (<strong>the</strong> Combined Energy Staff) and at times<br />
has served additionally as <strong>the</strong> director specifically in charge <strong>of</strong> particular<br />
Offices <strong>of</strong> <strong>the</strong> Agency. In assisting <strong>the</strong> Executive Director, <strong>the</strong> Deputy<br />
provides support in all <strong>the</strong> sectors <strong>of</strong> <strong>the</strong> Executive Director’s responsibilities<br />
[See Section E-1 above] and also undertakes particular functions and<br />
missions as requested. Those particular tasks have included taking <strong>the</strong> lead<br />
in <strong>the</strong> preparation <strong>of</strong> policy documents for <strong>the</strong> Ministerial meetings <strong>of</strong> <strong>the</strong><br />
Governing Board, in <strong>the</strong> preparation <strong>of</strong> <strong>the</strong> draft Programmes <strong>of</strong> Work and<br />
Budgets <strong>of</strong> <strong>the</strong> Agency, in <strong>the</strong> representation <strong>of</strong> <strong>the</strong> Agency at international<br />
conferences on energy and <strong>the</strong> environment and in <strong>the</strong> development and<br />
execution <strong>of</strong> <strong>the</strong> Agency’s policies and programmes for <strong>the</strong> countries <strong>of</strong><br />
Central and Eastern Europe.<br />
One <strong>of</strong> <strong>the</strong> most far-reaching functions <strong>of</strong> <strong>the</strong> Deputy is, upon <strong>the</strong><br />
decision <strong>of</strong> <strong>the</strong> Governing Board, to carry out <strong>the</strong> functions <strong>of</strong> <strong>the</strong> Executive<br />
Director when <strong>the</strong> Executive Director is departing, and until a successor can<br />
be appointed. This occurred in <strong>the</strong> case <strong>of</strong> Dr. Lantzke’s departure, when<br />
<strong>the</strong> Board “agreed that <strong>the</strong> Deputy Executive Director, Mr. J. Wallace<br />
Hopkins, take over <strong>the</strong> Executive Director’s functions on an Acting Basis”<br />
[<strong>IEA</strong>/GB(84)15, Item 2(d); <strong>IEA</strong>/GB(84)16, Item 3(d)]. Mr. Hopkins did so<br />
until Mrs. Steeg took up her duties on 1 July 1984.<br />
2. Appointment<br />
Although <strong>the</strong> I.E.P. Agreement and <strong>the</strong> Council Decision establish <strong>the</strong><br />
procedures for appointing <strong>the</strong> Executive Director [See Section E-2 above],<br />
<strong>the</strong>re is no specific provision for procedures to govern <strong>the</strong> appointment <strong>of</strong><br />
<strong>the</strong> Deputy. Since Article 59.4 does provide that “<strong>The</strong> Governing Board,<br />
acting by majority, shall take all decisions necessary for <strong>the</strong> establishment<br />
and <strong>the</strong> functioning <strong>of</strong> <strong>the</strong> Secretariat”, <strong>the</strong> Board itself could take <strong>the</strong><br />
decision to appoint <strong>the</strong> Deputy and fix <strong>the</strong> term <strong>of</strong> <strong>of</strong>fice and o<strong>the</strong>r<br />
conditions <strong>of</strong> service, but that was not done in <strong>the</strong> case <strong>of</strong> ei<strong>the</strong>r <strong>of</strong> <strong>the</strong> two<br />
<strong>of</strong>ficers who have held <strong>the</strong> Deputy post to date, although <strong>the</strong> decisions on<br />
<strong>the</strong> creation and continuation <strong>of</strong> <strong>the</strong> post itself were taken by <strong>the</strong> Governing<br />
Board in <strong>the</strong> annual budget decisions process.<br />
<strong>The</strong> appointment procedures for <strong>the</strong> Deputy Executive Director have<br />
evolved as a function <strong>of</strong> <strong>the</strong> change in status <strong>of</strong> <strong>the</strong> post from an OECD<br />
265
“classified” post (Grade A-7) at <strong>the</strong> outset <strong>of</strong> <strong>the</strong> Agency in <strong>1974</strong>, to a more<br />
senior “unclassified” post in 1980. <strong>The</strong> appointment <strong>of</strong> J. Wallace Hopkins<br />
as <strong>the</strong> first Deputy on 15 January 1975 was made by <strong>the</strong> Secretary-General<br />
upon <strong>the</strong> recommendation <strong>of</strong> <strong>the</strong> Executive Director, and in accordance with<br />
normal OECD procedures. In OECD terms that post carried <strong>the</strong> OECD<br />
designation <strong>of</strong> “Director”, although Mr. Hopkins’ <strong>of</strong>ficial title was Deputy<br />
Executive Director <strong>of</strong> <strong>the</strong> <strong>IEA</strong>.<br />
In February 1980 Mr. Hopkins’ appointment status was changed to<br />
reflect <strong>the</strong> growth in <strong>the</strong> responsibilities <strong>of</strong> his post. Acting after <strong>the</strong><br />
Executive Director had consulted extensively both with Delegations and<br />
with Governing Board members and upon <strong>the</strong> Executive Director’s own<br />
recommendation, <strong>the</strong> Secretary-General decided that <strong>the</strong> Deputy Executive<br />
Director in <strong>of</strong>fice (Mr. Hopkins) would “act in that capacity in respect <strong>of</strong> <strong>the</strong><br />
co-ordination <strong>of</strong> energy policies <strong>of</strong> <strong>the</strong> Organisation as well as in respect <strong>of</strong><br />
<strong>the</strong> Agency”. On 18-19 February 1980 <strong>the</strong> Governing Board noted <strong>the</strong><br />
Secretary-General’s action and noted that <strong>the</strong> Governing Board Chairman<br />
and <strong>the</strong> Executive Director would contact <strong>the</strong> Secretary-General concerning<br />
<strong>the</strong> details <strong>of</strong> that decision. <strong>The</strong> Board also noted <strong>the</strong> approximate increase<br />
in costs <strong>of</strong> <strong>the</strong> decision and accepted <strong>the</strong> budgetary implications [See<br />
Confidential Annex to <strong>the</strong> Governing Board’s Conclusions for that meeting,<br />
<strong>IEA</strong>/GB(80)19]. Those contacts led to <strong>the</strong> Secretary-General’s decision<br />
fixing <strong>the</strong> higher salary, allowances and benefits <strong>of</strong> <strong>the</strong> Deputy Executive<br />
Director at <strong>the</strong> levels that apply to <strong>the</strong> unclassified “Special Counsellors” <strong>of</strong><br />
<strong>the</strong> Organisation, although <strong>the</strong> Deputy Executive Director’s <strong>of</strong>ficial title did<br />
not change. <strong>The</strong>reafter <strong>the</strong> Deputy’s post was carried in <strong>of</strong>ficial documents<br />
as an “unclassified” one in <strong>IEA</strong> and OECD practice.<br />
<strong>The</strong> procedure for appointment <strong>of</strong> Mr. John P. Ferriter as Mr. Hopkins’<br />
successor was substantially similar, but procedurally less complex, because<br />
<strong>the</strong> key relationships had been established in 1980. In October 1988, Mrs.<br />
Steeg advised <strong>the</strong> Governing Board that Mr. Hopkins had recently informed<br />
her <strong>of</strong> his intention to relinquish his responsibilities as Deputy with effect<br />
after <strong>the</strong> 1989 Ministerial meeting <strong>of</strong> <strong>the</strong> Governing Board, and that she<br />
intended to seek <strong>the</strong> most highly qualified person as his replacement. Before<br />
<strong>the</strong> December 1988 meeting <strong>of</strong> <strong>the</strong> Board, Mrs. Steeg had determined that<br />
Mr. Ferriter would best meet that requirement. On 12 December she so<br />
informed <strong>the</strong> <strong>IEA</strong> Heads <strong>of</strong> Delegation (not <strong>the</strong> Governing Board itself,<br />
which did not need to act on <strong>the</strong> proposal) and stated that she would advise<br />
Mr. Ferriter <strong>of</strong> <strong>the</strong> intention to appoint him at <strong>the</strong> appropriate time in 1989.<br />
<strong>The</strong> Secretary-General had already agreed that Mr. Ferriter would be<br />
appointed, like Mr. Hopkins, as Deputy for Co-ordination <strong>of</strong> Energy Policies<br />
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<strong>of</strong> <strong>the</strong> Organisation. Mrs. Steeg would give Mr. Ferriter a “letter <strong>of</strong> intent”<br />
about his later formal appointment so he could look after his personal<br />
affairs; it was quite clear that her intention was shared by <strong>the</strong> Heads <strong>of</strong><br />
Delegation, and <strong>the</strong> letter <strong>of</strong> intent was dispatched on 14 December 1988.<br />
<strong>The</strong>reafter, in March 1989, Mr. Hopkins gave his resignation with effect on<br />
7 July, and upon Mrs. Steeg’s recommendation <strong>the</strong> Secretary-General<br />
appointed Mr. Ferriter as Deputy with effect on 1 July, <strong>the</strong> slight over lap<br />
having been <strong>the</strong> subject <strong>of</strong> an informal consultation with <strong>the</strong> Governing<br />
Board.<br />
In sum, this procedure for <strong>the</strong> appointment <strong>of</strong> <strong>the</strong> Deputy Executive<br />
Director required no action by <strong>the</strong> Governing Board, but ra<strong>the</strong>r <strong>the</strong><br />
Executive Director’s recommendation to <strong>the</strong> Secretary-General who in turn<br />
made <strong>the</strong> decision on <strong>the</strong> issuance <strong>of</strong> <strong>the</strong> letter <strong>of</strong> appointment. <strong>The</strong> process<br />
remains an administrative ra<strong>the</strong>r than a political one, and it has proceeded<br />
smoothly in <strong>the</strong> two cases that have occurred to date.<br />
3. Term <strong>of</strong> Office<br />
Unlike <strong>the</strong> Executive Director who serves essentially at <strong>the</strong> pleasure <strong>of</strong> <strong>the</strong><br />
Board [See Section E-4 above], <strong>the</strong> Deputy was appointed in each case for a<br />
fixed term, always with <strong>the</strong> possibility <strong>of</strong> renewal. Both <strong>of</strong> <strong>the</strong> Deputies were<br />
initially appointed for three year terms which were renewed successively as<br />
appropriate pursuant to OECD personnel rules and practices. <strong>The</strong> right <strong>of</strong><br />
terminating <strong>the</strong> appointment by resignation is not provided specifically in<br />
<strong>the</strong> applicable texts, but <strong>of</strong> course it is available and it was exercised by<br />
Mr. Hopkins.<br />
4. Conditions <strong>of</strong> Service<br />
<strong>The</strong> rank <strong>of</strong> <strong>the</strong> Deputy Executive Director in <strong>the</strong> OECD personnel system<br />
has not been specified in any formal text but it corresponds to <strong>the</strong> rank <strong>of</strong><br />
<strong>the</strong> OECD Special Counsellor, one rank below <strong>the</strong> Deputy Secretaries-<br />
General and <strong>the</strong> Executive Director, and one rank above <strong>the</strong> Directors.<br />
<strong>The</strong> salary, allowances and benefits concepts for <strong>the</strong> Deputy remain<br />
unchanged since <strong>the</strong>y were established in 1980 (although <strong>the</strong> actual levels<br />
have <strong>of</strong> course evolved with <strong>the</strong> periodic adjustments). However,<br />
<strong>the</strong>y continue to be fixed at <strong>the</strong> levels applicable to <strong>the</strong> OECD Special<br />
Counsellors.<br />
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G. Staff Policies and Conditions <strong>of</strong> Service<br />
While <strong>the</strong> basic framework for staff appointments and conditions <strong>of</strong> service<br />
is provided by <strong>the</strong> OECD Staff Regulations, Rules and Instructions, <strong>the</strong><br />
<strong>IEA</strong> has adopted a number <strong>of</strong> rules and practices <strong>of</strong> its own. As noted<br />
above, <strong>the</strong> Governing Board determined early in <strong>the</strong> life <strong>of</strong> <strong>the</strong> Agency that<br />
<strong>the</strong> Executive Director should seek <strong>the</strong> “high quality personnel he needs”<br />
[<strong>IEA</strong>/GB(74)9(1st Revision), Item 9(d)], and it decided “to recruit mainly<br />
government <strong>of</strong>ficials for <strong>the</strong> A-grade posts” on a fixed term basis for “in<br />
principle, approximately three years with necessary flexibility in duration<br />
on a case by case basis” [<strong>IEA</strong>/GB(74)11(1st Revision), Item 5(f)]. <strong>The</strong><br />
only indefinite appointments would be those <strong>of</strong> Staff who were <strong>the</strong>n<br />
holding such appointments in <strong>the</strong> OECD and who were transferring to <strong>the</strong><br />
<strong>IEA</strong>. When no Governing Board directive has been made, <strong>the</strong> Agency<br />
follows OECD policies in this sector. OECD rules refer to giving “primary<br />
consideration to <strong>the</strong> necessity to obtain staff <strong>of</strong> <strong>the</strong> highest standards <strong>of</strong><br />
competence and integrity” [Regulation 7 a)] and to providing, “so far as<br />
possible, for an equitable distribution <strong>of</strong> posts among <strong>the</strong> nationals <strong>of</strong><br />
Members <strong>of</strong> <strong>the</strong> Organisation, in particular as regards senior posts”<br />
[Regulation 7 b)]. Staff are required to possess “<strong>the</strong> degree <strong>of</strong> physical<br />
fitness needed for <strong>the</strong>ir posts” [Regulation 7 c)]. <strong>The</strong> OECD Staff<br />
Instructions also provide that “A person shall not normally be appointed as<br />
an <strong>of</strong>ficial unless he is a national <strong>of</strong> a Member <strong>of</strong> <strong>the</strong> Organisation and is<br />
between <strong>the</strong> ages <strong>of</strong> twenty-one and fifty-five” [Instruction 107/1]. “All<br />
posts in <strong>the</strong> Organisation shall be open equally to men and women”<br />
[Instruction 107/1.1]. OECD rules also provide for fixed term or<br />
indefinite appointments [Regulation 9 a)], with fixed term appointments<br />
not to exceed five years initially, and contain detailed rules about<br />
appointments beyond <strong>the</strong> initial period [See Regulation 9 b)].<br />
<strong>IEA</strong> practice falls broadly within all <strong>of</strong> <strong>the</strong> foregoing rules and<br />
policies. Geographical balance within <strong>the</strong> Agency overall and within <strong>the</strong><br />
major parts <strong>of</strong> <strong>the</strong> Secretariat has always been an important and regular<br />
consideration. Balance reflecting <strong>the</strong> scope and size <strong>of</strong> <strong>the</strong> Member’s energy<br />
economy and its budgetary contributions is not overlooked, and within <strong>the</strong><br />
limits imposed by o<strong>the</strong>r recruiting norms, an effort is made to have at least<br />
one Staff Member appointed from each Member country, but this is not<br />
possible at all times. An overriding consideration is always <strong>the</strong> need to have<br />
<strong>the</strong> highest level <strong>of</strong> competence. Whatever <strong>the</strong> geographical balance <strong>of</strong> <strong>the</strong><br />
moment might be, countries under-represented one year might well be overrepresented<br />
<strong>the</strong> next, so a certain degree <strong>of</strong> flexibility has been maintained.<br />
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<strong>The</strong>re are no posts assigned ei<strong>the</strong>r formally or informally to any country.<br />
Indeed, all vacant posts are open to nationals <strong>of</strong> all Members at all times.<br />
Up to <strong>the</strong> present time, all Staff appointments in <strong>the</strong> <strong>IEA</strong> have been<br />
limited, like those in <strong>the</strong> OECD, to nationals <strong>of</strong> OECD Member countries,<br />
despite <strong>the</strong> fact that under <strong>the</strong> rules cited above, <strong>the</strong>re would seem to be <strong>the</strong><br />
possibility <strong>of</strong> appointing nationals <strong>of</strong> non-Member countries when necessary<br />
to obtain specific competencies. <strong>The</strong> accepted view has been that <strong>the</strong><br />
Secretary-General was not authorized to recruit Staff who were nationals <strong>of</strong><br />
non-Member countries, except by derogation granted by <strong>the</strong> Council. An<br />
exception for non-nationals <strong>of</strong> Members was made in one recent case,<br />
following <strong>the</strong> accession <strong>of</strong> several OECD non-Member countries to <strong>the</strong><br />
European Conference <strong>of</strong> Ministers <strong>of</strong> Transport (ECMT), which <strong>the</strong> OECD<br />
assists in personnel administration. In 1993 <strong>the</strong> Secretary-General was<br />
authorized to recruit, as <strong>of</strong>ficials for <strong>the</strong> Secretariat <strong>of</strong> <strong>the</strong> ECMT, persons<br />
who are nationals <strong>of</strong> any Member country <strong>of</strong> that Conference. For <strong>the</strong> <strong>IEA</strong>,<br />
<strong>the</strong> Governing Board could make its own rules on such personnel policy<br />
questions as nationality <strong>of</strong> Staff, but <strong>the</strong> occasion for <strong>the</strong> Board to do so has<br />
not yet arisen. Nationals <strong>of</strong> OECD non-Member countries have at times<br />
worked in <strong>the</strong> Agency as consultants under <strong>the</strong> more flexible regime<br />
applicable to personnel in that category.<br />
<strong>The</strong> Governing Board’s preference for <strong>the</strong> appointment <strong>of</strong> government<br />
<strong>of</strong>ficials has been followed throughout <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency, but<br />
appointment <strong>of</strong> o<strong>the</strong>rs has been found necessary at times. Expertise found<br />
only in <strong>the</strong> oil companies has been required for <strong>the</strong> emergency preparedness<br />
and oil market sectors <strong>of</strong> <strong>the</strong> Secretariat; persons with public utility<br />
expertise have been recruited from that industry for <strong>the</strong> Long-Term Office.<br />
O<strong>the</strong>r non-governmental recruitment sources have included universities,<br />
research institutions, consulting firms and individual consultants, law firms,<br />
news organizations and o<strong>the</strong>r intergovernmental organizations such as <strong>the</strong><br />
OECD, <strong>the</strong> European Communities (European Union), NATO and <strong>the</strong><br />
IAEA. Yet at all times <strong>the</strong> majority <strong>of</strong> <strong>the</strong> <strong>IEA</strong> pr<strong>of</strong>essional Staff has been<br />
recruited from <strong>the</strong> government departments or o<strong>the</strong>r units <strong>of</strong> Member<br />
governments in keeping with <strong>the</strong> Governing Board’s stated preference, with<br />
<strong>the</strong> advantages <strong>of</strong> giving those governments a direct presence in <strong>the</strong> Agency<br />
and <strong>of</strong> giving <strong>the</strong> Agency a knowledgeable expertise on <strong>the</strong> <strong>IEA</strong> in<br />
administrations when those Staff Members return to <strong>the</strong>ir own countries. In<br />
order to make <strong>the</strong>se advantages possible, secondment or detachment <strong>of</strong><br />
government <strong>of</strong>ficers to <strong>the</strong> <strong>IEA</strong> has been adopted in a number <strong>of</strong> cases.<br />
Under that procedure, <strong>the</strong> Staff Member retains <strong>the</strong> right to return to his or<br />
her government employment, but works under <strong>IEA</strong> loyalty and o<strong>the</strong>r rules<br />
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during <strong>the</strong> period <strong>of</strong> employment with <strong>the</strong> Agency. While that procedure<br />
has been useful for <strong>the</strong> appointment <strong>of</strong> <strong>of</strong>ficers from Member governments,<br />
it has not been followed for Staff recruited from non-governmental sources;<br />
those Staff Members are expected to sever all employment relations with<br />
<strong>the</strong>ir employers before taking up <strong>the</strong>ir duties with <strong>the</strong> Agency.<br />
<strong>The</strong> <strong>IEA</strong> practice with regard to <strong>the</strong> duration <strong>of</strong> appointments was<br />
initiated at <strong>the</strong> outset <strong>of</strong> <strong>the</strong> Agency’s operations. A few Staff Members with<br />
indefinite appointments transferred from <strong>the</strong> OECD to <strong>the</strong> <strong>IEA</strong>. Most <strong>of</strong><br />
<strong>the</strong>m retained those appointments throughout <strong>the</strong>ir <strong>IEA</strong> employment, but<br />
with <strong>the</strong> passage <strong>of</strong> time <strong>the</strong>ir number is necessarily a diminishing one.<br />
O<strong>the</strong>r newly recruited pr<strong>of</strong>essional level Staff remain on fixed term<br />
appointments throughout <strong>the</strong>ir stay in <strong>the</strong> Agency, and none has received an<br />
indefinite appointment which would carry commitments <strong>of</strong> long-term<br />
employment under <strong>the</strong> applicable OECD rules. <strong>IEA</strong> policy initially was to<br />
limit pr<strong>of</strong>essional appointments to three years under <strong>the</strong> Board’s decision<br />
quoted above, but to do so with flexibility. In more recent years it has<br />
become necessary to extend this policy, particularly for senior Staff, in a few<br />
cases to as much as six or seven years. Among <strong>the</strong> objectives <strong>of</strong> this limited<br />
appointment duration policy are (1) <strong>the</strong> periodic turnover bringing fresh<br />
ideas and energy policy views as well as up-dated expertise and enthusiasm<br />
into <strong>the</strong> Agency, (2) <strong>the</strong> avoidance <strong>of</strong> an entrenched bureaucracy in <strong>the</strong><br />
Agency, (3) <strong>the</strong> rotation <strong>of</strong> Staff out <strong>of</strong> <strong>the</strong> Agency back into <strong>the</strong>ir respective<br />
administrations on a regular basis, and <strong>the</strong>reby (4) enhancement <strong>of</strong> <strong>the</strong><br />
Members’ knowledge about <strong>the</strong> Agency and <strong>the</strong> increased usefulness <strong>of</strong> <strong>the</strong><br />
Agency to its membership. This policy was not without its counterbalancing<br />
costs, however: <strong>the</strong> financial outlays for frequent Staff removal<br />
costs, <strong>the</strong> time spent by most <strong>of</strong> <strong>the</strong> new Staff in adjusting to life in a new<br />
country in most cases, and <strong>the</strong> considerable effort devoted by some during<br />
<strong>the</strong> last part <strong>of</strong> <strong>the</strong>ir Agency period to assure employment after departing<br />
from <strong>the</strong> Agency. While <strong>the</strong>se factors have been recognized when <strong>the</strong><br />
duration <strong>of</strong> appointment policy has been applied over <strong>the</strong> years, <strong>the</strong> policy<br />
has not been changed fundamentally since it was adopted in <strong>1974</strong>.<br />
Aside from <strong>the</strong> exceptions mentioned above, <strong>the</strong> terms and conditions<br />
<strong>of</strong> service <strong>of</strong> <strong>the</strong> Secretariat are largely determined by <strong>the</strong> OECD Staff system<br />
procedures, salaries, allowances and benefits which normally meet <strong>IEA</strong><br />
requirements satisfactorily. Under OECD Staff Reg 4 b), “All rights,<br />
including title, copyright and patent rights in any work produced by an<br />
<strong>of</strong>ficial as part <strong>of</strong> his <strong>of</strong>ficial duties shall be vested in or assigned to <strong>the</strong><br />
Organisation”. Waivers <strong>of</strong> this rule as well as permissions for <strong>the</strong> publication<br />
<strong>of</strong> information derived from <strong>IEA</strong> work, for o<strong>the</strong>r publications, public acts<br />
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and statements, and for o<strong>the</strong>r public appearances are subject to decision <strong>of</strong><br />
<strong>the</strong> Executive Director, under general powers conferred in Article 59 <strong>of</strong> <strong>the</strong><br />
I.E.P. Agreement. Moreover, as OECD Staff Members, <strong>the</strong> individual<br />
Secretariat members enjoy <strong>the</strong> privileges and immunities <strong>of</strong> OECD Staff as<br />
provided in <strong>the</strong> applicable legal instruments. <strong>The</strong>y include <strong>the</strong> protection<br />
necessary to guarantee <strong>the</strong> independence and political neutrality <strong>of</strong> <strong>the</strong><br />
Secretariat: immunity from legal process for <strong>the</strong>ir <strong>of</strong>ficial acts, exemption<br />
from taxation <strong>of</strong> <strong>the</strong>ir salary and emoluments (or comparable treatment),<br />
immunity from immigration restrictions and alien registration, exchange<br />
facilities, repatriation facilities in time <strong>of</strong> international crisis and <strong>the</strong> right to<br />
import <strong>the</strong>ir furniture and effects when first taking up <strong>the</strong>ir duties, all as<br />
provided in <strong>the</strong> Supplementary Protocol No. 1 to <strong>the</strong> OECD Convention and<br />
o<strong>the</strong>r instruments.<br />
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CHAPTER VII<br />
Programmes <strong>of</strong> Work,<br />
Budgets and Finance<br />
This Chapter takes up <strong>the</strong> institutional mechanisms by which <strong>the</strong> Agency<br />
decides each year upon <strong>the</strong> particular activities it will undertake (<strong>the</strong><br />
Programmes <strong>of</strong> Work), <strong>the</strong> appropriation <strong>of</strong> <strong>the</strong> Agency funds for carrying<br />
out those activities (<strong>the</strong> Budgets) and <strong>the</strong> sources and modalities for<br />
obtaining those funds (Finance). <strong>The</strong> Programmes <strong>of</strong> Work and Budgets<br />
represent <strong>the</strong> culmination <strong>of</strong> a year-long process <strong>of</strong> evaluation, reflection,<br />
planning and practical preparations concerning <strong>the</strong> Agency’s operations<br />
foreseen for <strong>the</strong> year ahead. Quite <strong>of</strong>ten in this process, innovations are<br />
achieved in <strong>IEA</strong> policies, operations or structures; <strong>the</strong> importance <strong>of</strong> such<br />
innovations to <strong>the</strong> realization <strong>of</strong> <strong>IEA</strong> objectives and <strong>the</strong> continuing viability<br />
<strong>of</strong> <strong>the</strong> Agency cannot be sufficiently underscored.<br />
<strong>The</strong> Introductory Summary Section which follows describes briefly<br />
each <strong>of</strong> <strong>the</strong> principal programme, budget and financing mechanisms<br />
toge<strong>the</strong>r with <strong>the</strong> procedural steps leading up to final decisions.<br />
A. Introductory Summary<br />
While <strong>the</strong> broad programme <strong>of</strong> <strong>the</strong> Agency is set forth in <strong>the</strong> I.E.P.<br />
Agreement, and <strong>the</strong> Agreement contains considerable detail for certain<br />
sectors <strong>of</strong> that programme, such as <strong>the</strong> oil Emergency Sharing System, <strong>the</strong><br />
oil market and <strong>the</strong> energy information systems, in most o<strong>the</strong>r sectors <strong>the</strong><br />
Agreement provides more a general framework than a body <strong>of</strong> programme<br />
detail. This is particularly <strong>the</strong> case for long-term co-operation, consultation<br />
with oil companies, and international energy relations. Hence it was<br />
expressly provided in <strong>the</strong> I.E.P. Agreement that <strong>the</strong> Governing Board would<br />
adopt programme decisions to complement <strong>the</strong> Agreement within <strong>the</strong> limits<br />
<strong>of</strong> competencies conferred by <strong>the</strong> Agreement, and it was foreseen but not<br />
specifically provided that <strong>the</strong> Governing Board would decide upon specific<br />
<strong>IEA</strong> activities in annual Programmes <strong>of</strong> Work.<br />
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To a large extent, <strong>the</strong> <strong>IEA</strong> follows OECD practices in <strong>the</strong> format and<br />
presentation <strong>of</strong> <strong>the</strong> annual Programmes <strong>of</strong> Work and <strong>of</strong> <strong>the</strong> corresponding<br />
financing arrangements. <strong>The</strong> Programmes <strong>of</strong> Work typically set out<br />
elements <strong>of</strong> policy and operational context, summarize <strong>the</strong> main lines <strong>of</strong><br />
work as well as organizational and personnel changes and describe in detail<br />
<strong>the</strong> particular activities to be undertaken during <strong>the</strong> year. <strong>The</strong> Programmes<br />
characterize each activity as “Core” (“central and indispensable”) or<br />
“O<strong>the</strong>r” (“all additional work”) and show <strong>the</strong> estimated number <strong>of</strong> Staff<br />
months for each activity. <strong>The</strong> activity descriptions enter into considerable<br />
detail and are supported by tabular presentations showing months <strong>of</strong> effort<br />
by Staff and consultants and cross-cutting activities. Although <strong>the</strong> activities<br />
and priorities may be revised in response to changing circumstances and<br />
challenges in <strong>the</strong> course <strong>of</strong> <strong>the</strong> year, and <strong>IEA</strong> Members recognize <strong>the</strong> need<br />
for such operational flexibility, <strong>the</strong> Programmes <strong>of</strong> Work provide <strong>the</strong> best<br />
overall statement <strong>of</strong> <strong>IEA</strong> activities each year.<br />
<strong>The</strong> draft Budgets are prepared by <strong>the</strong> Secretariat as a function <strong>of</strong> <strong>the</strong><br />
corresponding draft Programmes <strong>of</strong> Work, and <strong>the</strong> two are presented<br />
toge<strong>the</strong>r in a single document. Each draft Budget contains specific<br />
appropriations proposed for Staff, operating expenditures, translations,<br />
documents and publications, equipment and o<strong>the</strong>r expenditures. It also<br />
presents in schematic form a summary <strong>of</strong> <strong>the</strong> draft Budget proposal<br />
compared to <strong>the</strong> Budget <strong>of</strong> <strong>the</strong> previous year, <strong>the</strong> proposed financing <strong>of</strong> <strong>the</strong><br />
Budget and a comparison with <strong>the</strong> previous year. It sets forth <strong>the</strong> relevant<br />
financial analysis and states <strong>the</strong> Secretariat’s requests to <strong>the</strong> Budget<br />
Committee for particular actions. <strong>The</strong> draft Budget is accompanied by a<br />
manning table showing <strong>the</strong> proposed individual posts and <strong>the</strong> structure <strong>of</strong><br />
<strong>the</strong> Secretariat. <strong>The</strong> Agency’s annual Budgets began in 1975 at <strong>the</strong> level <strong>of</strong><br />
almost FF 22,000,000, and increased over <strong>the</strong> years with enlarged<br />
programmes and increased costs to a total appropriation <strong>of</strong> FF 136,578,300<br />
(subject to modification) for <strong>1994</strong>, slightly less in proportion to <strong>the</strong> increase<br />
in OECD Part I Budgets during <strong>the</strong> same period.<br />
<strong>The</strong> arrangements for <strong>the</strong> financing <strong>of</strong> <strong>the</strong> Agency’s programmes not<br />
only provide <strong>the</strong> resources that enable <strong>the</strong> Agency to operate, but also<br />
influence <strong>the</strong> financing priorities as well as <strong>the</strong> more detailed scope, content<br />
and relative timing <strong>of</strong> Agency operations, through <strong>the</strong> amounts and<br />
particular allocation <strong>of</strong> funds. Those appropriations have been funded on<br />
<strong>the</strong> income side by <strong>the</strong> assessed contributions <strong>of</strong> <strong>IEA</strong> Members under Part II<br />
<strong>of</strong> <strong>the</strong> OECD Budget, by voluntary contributions and grants, and by income<br />
from <strong>the</strong> sales <strong>of</strong> publications and <strong>the</strong> provision <strong>of</strong> services. In <strong>the</strong> years<br />
prior to <strong>1994</strong>, as will be seen below, a portion <strong>of</strong> <strong>IEA</strong> financing was also<br />
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provided by all OECD Members under Part I <strong>of</strong> <strong>the</strong> Budget <strong>of</strong> that<br />
Organisation.<br />
<strong>The</strong> financing <strong>of</strong> <strong>the</strong> <strong>IEA</strong> depends heavily upon OECD financial<br />
principles and procedures, which in turn reflect <strong>the</strong> mainstream financing<br />
practices <strong>of</strong> o<strong>the</strong>r intergovernmental organizations; <strong>the</strong>se are, <strong>of</strong> course,<br />
subject to <strong>the</strong> particular rules which apply to <strong>the</strong> <strong>IEA</strong> as well as to a broad<br />
overriding power vested in <strong>the</strong> Governing Board. <strong>The</strong> Governing Board is<br />
empowered to adopt financial regulations for <strong>the</strong> Agency but has not done<br />
so in a traditional, systematic form. <strong>The</strong> Board has adopted a number <strong>of</strong><br />
independent financial decisions, but when <strong>the</strong>re is no conflict between those<br />
Governing Board decisions and <strong>the</strong> OECD Financial Regulations, <strong>the</strong><br />
Agency applies <strong>the</strong> OECD Financial Regulations.<br />
Each year <strong>the</strong> Board adopts a scale <strong>of</strong> contributions, which is required<br />
by Article 64.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement, and calculated on <strong>the</strong> basis <strong>of</strong><br />
principles adopted in <strong>the</strong> OECD for its scales <strong>of</strong> contributions. <strong>The</strong> scales<br />
are based mostly on <strong>the</strong> relative GNP <strong>of</strong> each Member, subject to a specified<br />
minimum and maximum. <strong>The</strong>se scales produce for each Member a<br />
contribution rate expressed as a percentage which is applied to <strong>the</strong> total<br />
Budget amount to determine <strong>the</strong> monetary amount <strong>of</strong> each Member’s<br />
assessed contribution. Members are legally obliged to make <strong>the</strong><br />
contributions assessed by <strong>the</strong> Governing Board. Those contributions are<br />
supplemented by voluntary contributions and grants which constitute a<br />
limited but important source <strong>of</strong> <strong>IEA</strong> revenue; <strong>the</strong>y are dedicated to specific<br />
activities under <strong>the</strong> Programmes <strong>of</strong> Work and require Governing Board<br />
authorization. <strong>The</strong> Board accepts <strong>the</strong> contribution or grant and makes <strong>the</strong><br />
appropriation <strong>of</strong> <strong>the</strong> funds at its meetings or by an approved written<br />
procedure. Moreover, <strong>the</strong>re are provisions in Articles 64.2 and 65 <strong>of</strong> <strong>the</strong><br />
I.E.P. Agreement that special activities carried out in <strong>the</strong> <strong>IEA</strong> by two or<br />
more Members be financed in whatever way <strong>the</strong> participants in those<br />
activities agree among <strong>the</strong>mselves, but this type <strong>of</strong> financing has yet to be<br />
employed explicitly in Agency Budgets.<br />
<strong>The</strong> Governing Board is empowered to make decisions on <strong>the</strong><br />
Programmes <strong>of</strong> Work and Budgets, on Members’ contributions as well as on<br />
all o<strong>the</strong>r matters involving <strong>the</strong> financial administration <strong>of</strong> <strong>the</strong> Agency.<br />
<strong>The</strong>se decisions are all made formally by majority vote under I.E.P. rules,<br />
although in practice <strong>the</strong> Board acts by consensus on <strong>the</strong>se as well as o<strong>the</strong>r<br />
questions. Once adopted by <strong>the</strong> Governing Board, each <strong>IEA</strong> Budget is<br />
incorporated into Part II <strong>of</strong> <strong>the</strong> OECD Budget for <strong>the</strong> year by decision <strong>of</strong> <strong>the</strong><br />
OECD Council, under a special formula set out in <strong>the</strong> OECD Council<br />
Decision, providing in effect for <strong>the</strong> same majority that adopted <strong>the</strong> Budget<br />
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in <strong>the</strong> Board. <strong>The</strong>se decisions are formally taken by agreement in <strong>the</strong><br />
Council by <strong>the</strong> same Members which had voted for <strong>the</strong>m in <strong>the</strong> <strong>IEA</strong><br />
Governing Board, thus preserving <strong>the</strong> Board’s autonomy on budgetary<br />
questions.<br />
Programmes <strong>of</strong> Work and Budgets are developed in <strong>the</strong> course <strong>of</strong> <strong>the</strong><br />
year by <strong>the</strong> Secretariat acting on guidance provided by <strong>the</strong> Governing Board<br />
at Ministerial as well as <strong>of</strong>ficial level, by <strong>the</strong> Standing Groups, by<br />
Committees, and at times by informal “brainstorming” meetings <strong>of</strong><br />
representatives <strong>of</strong> Members and <strong>the</strong> Secretariat. <strong>The</strong> draft Budget is<br />
prepared by <strong>the</strong> Secretariat with <strong>the</strong> collaboration <strong>of</strong> OECD budget experts<br />
and <strong>of</strong> <strong>the</strong> Chairman <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Budget Committee. A document containing<br />
both drafts is distributed to Delegations early in <strong>the</strong> autumn <strong>of</strong> each year<br />
and receives first consideration at <strong>the</strong> next meeting <strong>of</strong> <strong>the</strong> Governing Board,<br />
which typically comments upon and approves <strong>the</strong> directions <strong>of</strong> <strong>the</strong> work<br />
contained in <strong>the</strong> draft Programme <strong>of</strong> Work and transmits <strong>the</strong> document to<br />
<strong>the</strong> <strong>IEA</strong> Budget Committee with instructions to consider <strong>the</strong> resources which<br />
would be required for <strong>the</strong> following year. <strong>The</strong> Committee in turn reports to<br />
<strong>the</strong> Governing Board as requested. Early in December <strong>the</strong> Governing Board<br />
considers <strong>the</strong> Secretariat’s proposals toge<strong>the</strong>r with <strong>the</strong> Budget Committee’s<br />
report and adopts <strong>the</strong> Programme <strong>of</strong> Work and Budget for <strong>the</strong> following<br />
calendar year. <strong>The</strong> Budget is <strong>the</strong>n transmitted to <strong>the</strong> OECD Council for<br />
formal adoption into Part II <strong>of</strong> <strong>the</strong> OECD Budget under <strong>the</strong> <strong>IEA</strong> Budget<br />
procedure mentioned above. <strong>The</strong> Programme <strong>of</strong> Work is transmitted to <strong>the</strong><br />
Council for information but not for adoption. In <strong>the</strong> course <strong>of</strong> <strong>the</strong> financial<br />
year, supplementary Budgets may also be adopted, but for <strong>the</strong> <strong>IEA</strong> this has<br />
been utilized rarely.<br />
B. Programmes <strong>of</strong> Work<br />
1. Function<br />
<strong>The</strong> Agency’s operational authority is established in four principal sources:<br />
<strong>the</strong> I.E.P. Agreement, <strong>the</strong> annual Programmes <strong>of</strong> Work adopted by <strong>the</strong><br />
Governing Board, particular programme decisions <strong>of</strong> <strong>the</strong> Governing Board<br />
in <strong>the</strong> course <strong>of</strong> <strong>the</strong> year, and adjustments that are made to meet current<br />
developments. <strong>The</strong> broad programme <strong>of</strong> <strong>the</strong> Agency is set forth in <strong>the</strong> I.E.P.<br />
Agreement in considerable detail as respects <strong>the</strong> oil Emergency Sharing<br />
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System, <strong>the</strong> oil market and <strong>the</strong> emergency information sectors, where clear<br />
treaty obligations were necessary from <strong>the</strong> outset. Even in those sectors,<br />
however, <strong>the</strong> specific activities to be undertaken during <strong>the</strong> year, for<br />
example, refining <strong>the</strong> Sharing System, need to be developed in <strong>the</strong> annual<br />
work programmes. For o<strong>the</strong>r sectors <strong>of</strong> <strong>IEA</strong> actions, such as long-term<br />
co-operation, energy research and development, co-operation with<br />
oil companies, relations with non-Member countries, statistics and<br />
publications, <strong>the</strong> I.E.P Agreement contains less detail than was <strong>the</strong> case for<br />
<strong>the</strong> o<strong>the</strong>r sectors, and <strong>the</strong> programme was all but entirely left to later<br />
development by <strong>the</strong> Governing Board. <strong>The</strong> Board has developed those<br />
sectors in a number <strong>of</strong> decisions (<strong>the</strong> Long-Term Co-operation Programme<br />
adopted in 1976 is probably <strong>the</strong> most noteworthy <strong>of</strong> <strong>the</strong>m), but this was<br />
done in broad policy terms which require periodic specification under<br />
Agency procedures. <strong>The</strong> Agreement conferred on <strong>the</strong> Board not only<br />
specific mandates to develop <strong>the</strong> Agency’s programme in most sectors, but<br />
also broad authority under Article 51 for <strong>the</strong> functioning <strong>of</strong> <strong>the</strong> I.E.P.<br />
Program overall, an authority which <strong>the</strong> Board exercises in part by means <strong>of</strong><br />
<strong>the</strong> annual Programme actions <strong>the</strong> Board has taken from <strong>the</strong> outset in <strong>1974</strong>.<br />
While <strong>the</strong> I.E.P. Agreement makes no reference to annual Programmes <strong>of</strong><br />
Work, <strong>the</strong> intention to establish those programmes was clear, and <strong>the</strong> OECD<br />
Council Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency gave <strong>the</strong> Governing<br />
Board a specific program mandate [Article 6].<br />
<strong>The</strong> Programmes <strong>of</strong> Work perform a number <strong>of</strong> vital Agency<br />
functions, <strong>the</strong> most evident being <strong>the</strong> Board’s authorization to <strong>the</strong><br />
Secretariat to carry out <strong>the</strong> specific activities described in <strong>the</strong> Programmes.<br />
<strong>The</strong> Programmes normally contain also <strong>the</strong> Board’s approval <strong>of</strong> <strong>the</strong><br />
Secretariat’s assessment <strong>of</strong> <strong>the</strong> current energy situation, <strong>the</strong> identification <strong>of</strong><br />
policies needed to address that situation and <strong>the</strong> relative but informal<br />
priority status <strong>of</strong> certain activities. In adopting <strong>the</strong> Programmes, <strong>the</strong> Board<br />
adapts <strong>the</strong> objectives <strong>of</strong> <strong>the</strong> Agency to <strong>the</strong> current energy situation, guides<br />
<strong>the</strong> Secretariat in emphasizing <strong>the</strong> particular tasks that warrant attention,<br />
and assigns <strong>the</strong> specific activities to one or ano<strong>the</strong>r sector <strong>of</strong> <strong>the</strong> Secretariat;<br />
<strong>the</strong> Board may note for cross-cutting activities that more than one part <strong>of</strong><br />
<strong>the</strong> Secretariat will have responsibilities. Overall, <strong>the</strong> Programmes broadly<br />
describe those <strong>IEA</strong> activities which will engage <strong>the</strong> attention <strong>of</strong> <strong>the</strong><br />
Secretariat and Member countries throughout <strong>the</strong> year.<br />
One <strong>of</strong> <strong>the</strong> necessary implications <strong>of</strong> <strong>the</strong> system <strong>of</strong> periodic Programmes<br />
<strong>of</strong> Work is <strong>the</strong> introduction <strong>of</strong> innovation into <strong>IEA</strong> policies,<br />
structures and operations, a function <strong>the</strong> Programmes share with <strong>the</strong> annual<br />
Budgets, with ad hoc programme decisions <strong>of</strong> <strong>the</strong> Governing Board and <strong>the</strong><br />
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Executive Director. Innovation is a regular part <strong>of</strong> Programme development,<br />
a studied process described below in this Section and in Section B-3 under<br />
“Procedure”, which provides a systematic opportunity and vehicle for<br />
bringing about change. This appeared from <strong>the</strong> earliest years <strong>of</strong> <strong>the</strong> Agency<br />
and continues to <strong>the</strong> present day, whe<strong>the</strong>r <strong>the</strong> innovation originated with <strong>the</strong><br />
Secretariat, with Ministerial or <strong>of</strong>ficial level Board meetings, with <strong>the</strong><br />
Standing Groups and Committees or with <strong>the</strong> special “brainstorming”<br />
meetings <strong>of</strong> Members’ representatives and <strong>the</strong> Secretariat. More recently<br />
ano<strong>the</strong>r innovation source has been <strong>the</strong> meetings <strong>of</strong> Standing Group and<br />
Committee <strong>of</strong>ficers and <strong>the</strong> reports <strong>of</strong> <strong>the</strong> Chairmen <strong>of</strong> those bodies to <strong>the</strong><br />
Governing Board. Worthy proposals eventually find <strong>the</strong>ir way into <strong>the</strong><br />
Programmes <strong>of</strong> Work, ei<strong>the</strong>r as initial proposals or as eventual refinements<br />
and specifications <strong>of</strong> <strong>the</strong> proposals. Some recent major examples <strong>of</strong> new<br />
proposals include <strong>the</strong> introduction <strong>of</strong> energy and environment issues and <strong>of</strong><br />
<strong>the</strong> Eastern European Economies into <strong>the</strong> substantive work <strong>of</strong> <strong>the</strong> Agency,<br />
and <strong>the</strong> consequential changes in <strong>the</strong> Secretariat structure required for such<br />
work to be more effectively developed and carried out.<br />
Energy and <strong>the</strong> environment issues present a particularly significant<br />
example <strong>of</strong> <strong>the</strong> introduction <strong>of</strong> new programme activities. Environmental<br />
considerations have always played a role in <strong>IEA</strong> work, receiving some<br />
specific mention in Article 42.1(b) <strong>of</strong> <strong>the</strong> I.E.P. Agreement, but mainly<br />
indirect attention in <strong>the</strong> Long-Term Co-operation Programme adopted in<br />
1976. In <strong>the</strong> early years <strong>the</strong> <strong>IEA</strong> Secretariat maintained substantial but<br />
low-pr<strong>of</strong>ile interest in <strong>the</strong> subject. Systematic environmental programme<br />
efforts increased dramatically in <strong>the</strong> 1980s. In <strong>the</strong> 1980-1981 period, cooperation<br />
between <strong>the</strong> Agency and <strong>the</strong> OECD Environment Directorate was<br />
developed in <strong>the</strong> Programmes <strong>of</strong> Work [See <strong>IEA</strong>/GB(80)59, Annex I, p. 13;<br />
<strong>IEA</strong>/GB(81)58, Annex I, p. 6]. By 1985 work in that field was accorded<br />
much more visible attention in <strong>the</strong> text, but at <strong>the</strong> formal level <strong>of</strong> only eight<br />
Staff months, described in broad statements about <strong>the</strong> environment<br />
programme with little specific activity description [<strong>IEA</strong>/GB(84)28, Annex I,<br />
p. 13]. During this period <strong>the</strong> Programmes show mainly <strong>the</strong> maintenance <strong>of</strong><br />
a “watching brief”: monitoring, analysis and policy identification, with little<br />
increase in specific dedication <strong>of</strong> Staff effort to environment questions. <strong>The</strong><br />
1985 Ministerial Conclusions on Energy and <strong>the</strong> Environment found <strong>the</strong>ir<br />
way into <strong>the</strong> 1986 Programme, with <strong>the</strong> statement that special attention to<br />
those conclusions will “affect all aspects <strong>of</strong> <strong>the</strong> work on energy demand and<br />
<strong>the</strong> future energy mix, but particularly <strong>the</strong> work on conservation, coal and<br />
nuclear energy” [<strong>IEA</strong>/GB(85)47, Annex I, pp. 12-13]. In <strong>the</strong> late 1980s<br />
and early 1990s <strong>the</strong> Agency’s environment work picked up dramatically. In<br />
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1987, “Continued work on <strong>the</strong> interplay between environmental policies<br />
and energy policies” entered <strong>the</strong> “Main Lines <strong>of</strong> <strong>the</strong> Programme <strong>of</strong> Work”,<br />
somewhat down on <strong>the</strong> list [<strong>IEA</strong>/GB(86)23, Annex I, p. 7], and since <strong>the</strong>n<br />
this work has appeared with increasing preeminence in this category <strong>of</strong> <strong>the</strong><br />
Programmes. By 1989 <strong>the</strong> concept <strong>of</strong> advancing both “energy security and<br />
environmental objectives” was clearly stated in <strong>the</strong> Programme; <strong>the</strong>re was<br />
reference to <strong>the</strong> “broad brush” study as well as to climate change activity;<br />
and <strong>the</strong> Staff months devoted to this sector had doubled, with this work<br />
receiving particular attention [<strong>IEA</strong>/GB(88)24, pp.14 and 19].<br />
<strong>The</strong> 1990 Programme [<strong>IEA</strong>/GB(89)44, Annex I] brought still more<br />
far reaching developments. <strong>The</strong> Staff working on environment doubled<br />
again, and <strong>the</strong>y were grouped in a Task Force organized in <strong>the</strong> Long-Term<br />
Office <strong>of</strong> <strong>the</strong> Secretariat, with 31 Staff months to work on both “Core” and<br />
“O<strong>the</strong>r” energy and environment activities. In 1992 environment work was<br />
reorganized in a new Energy and Environment Division in <strong>the</strong> Long-Term<br />
Office, with still more Staff. Classified as a “cross-cutting” activity, and <strong>the</strong><br />
most visible <strong>of</strong> those activities, environment work was assigned on an<br />
“Agency-wide” basis [<strong>IEA</strong>/GB(91)47, Annex I, pp. 29-30]. Specific activities<br />
included <strong>the</strong> broad brush study, climate change, IPCC participation, <strong>the</strong><br />
role <strong>of</strong> industry and an assessment <strong>of</strong> international legal agreements in this<br />
sector. Environment work also appeared specifically or indirectly in most<br />
o<strong>the</strong>r sectors <strong>of</strong> <strong>the</strong> Programme. Later Programmes provided for additional<br />
activities such as environment work on transport, electricity, greenhouse<br />
gases, and subsidies. As environment work has progressed over <strong>the</strong> years,<br />
<strong>the</strong> corresponding Programme texts have changed from <strong>the</strong> early broad<br />
statements <strong>of</strong> concern and objectives (this was also true generally <strong>of</strong> <strong>the</strong><br />
Programmes), to more specific programme activities with increasingly<br />
detailed descriptions <strong>of</strong> <strong>the</strong> work to be carried out. <strong>The</strong> Programmes <strong>of</strong><br />
Work provided <strong>the</strong> vehicle for integrating <strong>the</strong>se initiatives into <strong>the</strong> Agency’s<br />
activities in an organized way and for suggesting <strong>the</strong> appropriate priorities.<br />
Informal expression <strong>of</strong> priority interests is a noteworthy, if not<br />
indispensable, part <strong>of</strong> <strong>the</strong> Programmes <strong>of</strong> Work in general, even if priorities<br />
were not mentioned as such, as was <strong>the</strong> case in <strong>the</strong> early years <strong>of</strong> <strong>the</strong><br />
Agency. <strong>The</strong> scope for action under <strong>the</strong> I.E.P. Agreement is so vast that <strong>the</strong><br />
very mention <strong>of</strong> a specific activity gives it a de facto priority interest vis-àvis<br />
o<strong>the</strong>r potential activities not expressly included in <strong>the</strong> Agreement. Not<br />
surprisingly, as <strong>the</strong> Agency’s work progressed in <strong>the</strong> late 1970s, specific<br />
priorities began to emerge in <strong>the</strong> Programmes <strong>of</strong> Work. In 1978, <strong>the</strong><br />
Programme contained a section entitled “Priorities for 1978”, which stated<br />
this:<br />
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9. To fulfil its objectives, <strong>the</strong> Agency must carefully identify <strong>the</strong><br />
specific issues where it can usefully make an impact in order to<br />
avoid dissipation <strong>of</strong> scarce resources both in national capitals<br />
and within <strong>the</strong> Secretariat. <strong>The</strong> Agency’s work should continue<br />
to concentrate on operational, policy oriented aspects <strong>of</strong> energy<br />
having relevance and potential for international concerted<br />
action. Issues having only national or regional importance<br />
should be referred to o<strong>the</strong>r competent bodies [<strong>IEA</strong>/GB(77)54,<br />
Attachment II, Annex I, p. 25].<br />
In <strong>the</strong> 1978 Programme “priority activities” were identified in <strong>the</strong> following<br />
sectors <strong>of</strong> <strong>IEA</strong> energy responsibility: national energy programmes and/or<br />
policies, long-term energy policies, oil supply/demand and market<br />
structures, R & D, worldwide energy co-operation, public information, data<br />
and analysis, and <strong>the</strong> emergency system.<br />
Priority indications were also <strong>the</strong> necessary outcome <strong>of</strong> several changes<br />
in presentation <strong>of</strong> <strong>the</strong> Programmes over <strong>the</strong> years. One such development<br />
appeared in <strong>the</strong> practice, begun in 1983, <strong>of</strong> assigning specified months <strong>of</strong><br />
Staff work to each described programme activity. In some later Programmes,<br />
as in 1985, <strong>the</strong> distinction was made between “Main Objectives and<br />
Priorities”, or comparable formulations, and <strong>the</strong> “Detailed Work Programme”<br />
with an indication that certain activities were central and continuing. For<br />
example, “Much <strong>of</strong> <strong>the</strong> long-term work is ongoing” [<strong>IEA</strong>/GB(84)28, Annex I,<br />
p. 7], while o<strong>the</strong>rs were less so or not so. In more recent years <strong>the</strong><br />
formulation “Main Lines <strong>of</strong> Substantive Work” has been employed to <strong>the</strong><br />
same effect. In this fashion, groups <strong>of</strong> priority activities were identified, but<br />
without clear indications <strong>of</strong> which topics could claim absolute priority over<br />
o<strong>the</strong>r topics in <strong>the</strong> group. In <strong>the</strong> 1990 Programme <strong>the</strong>re appeared for <strong>the</strong><br />
first time <strong>the</strong> classifications <strong>of</strong> “Core” and “O<strong>the</strong>r”, which were not<br />
specifically a statement <strong>of</strong> priority but permitted inferences about priorities.<br />
Continuing to <strong>the</strong> time <strong>of</strong> this writing, priorities and preferences in <strong>the</strong><br />
Programmes have been indicated by <strong>the</strong> inclusion <strong>of</strong> some activities and by<br />
silence concerning o<strong>the</strong>rs, by <strong>the</strong> relative assignment <strong>of</strong> Staff months <strong>of</strong><br />
work for each activity, by <strong>the</strong> distinction between “Core” and “O<strong>the</strong>r”<br />
activities and by <strong>the</strong> practice <strong>of</strong> identifying a group <strong>of</strong> priority subjects or<br />
activities in <strong>the</strong> “Main Lines <strong>of</strong> Substantive Work”. However, <strong>the</strong>se<br />
practices preserve <strong>the</strong> flexibility in <strong>the</strong> Programme which is constantly<br />
required to permit operational adjustment to change. Such a system <strong>of</strong>fers<br />
<strong>the</strong> advantage <strong>of</strong> highlighting certain items, all or most <strong>of</strong> which will indeed<br />
be given priority, and overcomes <strong>the</strong> disadvantage <strong>of</strong> having <strong>the</strong>m subjected<br />
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to an artificial exercise in making difficult or impossible comparisons or<br />
creating priority scales when none is necessary to achieve <strong>the</strong> desired<br />
programme results.<br />
2. Content and Style<br />
<strong>The</strong> content and style <strong>of</strong> <strong>the</strong> o<strong>the</strong>r sectors <strong>of</strong> <strong>the</strong> Agency’s work have<br />
developed in much <strong>the</strong> same way as those in <strong>the</strong> environment sector.<br />
Overall <strong>the</strong> Programmes have improved markedly since <strong>1974</strong>. <strong>The</strong> early<br />
Programmes were largely about organizational matters and objectives, as<br />
might be expected in <strong>the</strong> early years <strong>of</strong> any international institution. Quite<br />
broad formulations were employed with <strong>the</strong> expectation that, with <strong>the</strong><br />
guidance <strong>of</strong> <strong>the</strong> Governing Board and <strong>the</strong> Members’ Delegations, <strong>the</strong><br />
Secretariat would transform those formulations into specific programme<br />
activities as each year passed. That proved to be an efficient and workable<br />
procedure, particularly for <strong>the</strong> Secretariat and Delegations close to <strong>the</strong> work<br />
in Paris. However, for Members’ authorities not enjoying that advantage,<br />
which included energy <strong>of</strong>ficials in distant capitals, it was difficult to discern<br />
<strong>the</strong> full nature and scope <strong>of</strong> <strong>the</strong> specific activities in which <strong>the</strong> Agency was<br />
engaged and <strong>the</strong> priorities being applied. Hence <strong>the</strong>re began a process <strong>of</strong><br />
increasing <strong>the</strong> “transparency” <strong>of</strong> <strong>the</strong> Programmes and Budgets, for <strong>the</strong> most<br />
part a natural process <strong>of</strong> development as it became more feasible with <strong>the</strong><br />
passage <strong>of</strong> time for <strong>the</strong> Programmes to be written with more specificity.<br />
Over <strong>the</strong> years, format changes also aided this process <strong>of</strong> transparency.<br />
<strong>The</strong>se changes included <strong>the</strong> distinction between “Main Lines” <strong>of</strong><br />
work and <strong>the</strong> sectorial activity descriptions, <strong>the</strong> assignment <strong>of</strong> Staff months<br />
by activity, <strong>the</strong> “Core” and “O<strong>the</strong>r” distinction, <strong>the</strong> introduction <strong>of</strong> crosscutting<br />
activities and increased activity detail in <strong>the</strong> descriptions (eventually<br />
more than doubling <strong>the</strong> length <strong>of</strong> <strong>the</strong> Programme). None <strong>of</strong> <strong>the</strong>se<br />
developments was intended to establish formal priorities or o<strong>the</strong>r rigidity in<br />
<strong>the</strong> Agency’s work and none has done so in fact. It was clearly understood<br />
that managerial flexibility needed to be retained in order to meet changes<br />
which might be requested or become required as <strong>the</strong> work was under way.<br />
<strong>The</strong> Executive Director has made <strong>the</strong>se points to <strong>the</strong> Governing Board on a<br />
number <strong>of</strong> occasions. In <strong>the</strong> document presenting <strong>the</strong> 1986 Programme <strong>of</strong><br />
Work [<strong>IEA</strong>/GB(85)47, Annex I, p. 6], <strong>the</strong> Executive Director stated as<br />
respects <strong>the</strong> Programme description that:<br />
<strong>The</strong> description which follows presents <strong>the</strong> work being done by <strong>the</strong><br />
Secretariat as an integrated and interrelated whole. This reflects<br />
<strong>the</strong> fact that most <strong>of</strong> <strong>the</strong> Agency’s work is organized and<br />
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performed on a “subject matter” basis, which necessarily means<br />
that staff assigned to different <strong>of</strong>fices and divisions very frequently<br />
work toge<strong>the</strong>r regardless <strong>of</strong> <strong>the</strong>ir formal assignments. For<br />
example, work on conservation and alternative energy sources, as<br />
well as oil market developments, require economic analysis; oil<br />
market structures are intimately inter-related with emergency<br />
planning, developments in o<strong>the</strong>r energy sources and international<br />
energy relations; basic service functions such as statistics, public<br />
information and legal are involved in every aspect <strong>of</strong> <strong>the</strong> work.<br />
Thus, <strong>the</strong> work described below under one heading will in most<br />
cases be performed in part under several o<strong>the</strong>r headings as well;<br />
and <strong>the</strong> many necessary interactions between different parts <strong>of</strong> <strong>the</strong><br />
<strong>IEA</strong> Secretariat are accepted implicitly and not described explicitly.<br />
In <strong>the</strong> 1990 Programme document <strong>the</strong> Executive Director made <strong>the</strong> following<br />
statement on <strong>the</strong> need for flexibility [<strong>IEA</strong>/GB(89)44, Annex I, p. 6]:<br />
In presenting <strong>the</strong> Programme <strong>of</strong> Work for 1990, we have<br />
endeavored to respond to Member countries’ requests for<br />
additional detail regarding programme activities, particularly<br />
utilisation <strong>of</strong> staff resources. At <strong>the</strong> same time, Members must<br />
recognise <strong>the</strong> difficulty <strong>of</strong> projecting exactly how resources will<br />
be employed and <strong>the</strong> need, <strong>the</strong>refore, for <strong>the</strong> Secretariat to<br />
retain flexibility to shift resources as circumstances may dictate.<br />
<strong>The</strong> 1990 Programme <strong>of</strong> Work has set <strong>the</strong> pattern <strong>of</strong> content and style<br />
followed since that year, with fuller descriptions, clear designations <strong>of</strong> crosscutting<br />
subjects and numerous tables making <strong>the</strong> Programmes coherent and<br />
relatively easy to understand and utilize.<br />
3. Procedure<br />
Although <strong>the</strong> foregoing discussion has touched upon a number <strong>of</strong><br />
procedures employed in developing <strong>the</strong> Programmes, <strong>the</strong> overall procedures<br />
merit additional attention. Each yearly Programme begins to take form<br />
early in <strong>the</strong> preceding calendar year. In <strong>the</strong> first few years <strong>of</strong> <strong>the</strong> <strong>IEA</strong>, <strong>the</strong><br />
Programmes began life without systematic consideration by <strong>the</strong> competent<br />
Standing Groups and Committees, but <strong>the</strong> Board decided in 1983 that early<br />
consideration should take place in those organs <strong>of</strong> <strong>the</strong> Agency before <strong>the</strong><br />
draft Programme was prepared by <strong>the</strong> Secretariat [See <strong>IEA</strong>/GB(83)69, Item<br />
2(d)(ix) and Annex II]. In preparation for such consideration in Agency<br />
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organs, <strong>the</strong> Secretariat formulates and presents its views which are taken up<br />
in <strong>the</strong> Members’ discussion. This discussion is taken into account by <strong>the</strong><br />
Secretariat in <strong>the</strong> next phase <strong>of</strong> its work, which is <strong>the</strong> preparation <strong>of</strong> <strong>the</strong><br />
draft Programme document.<br />
<strong>The</strong> draft Programme is actually <strong>the</strong> product <strong>of</strong> a number <strong>of</strong> different<br />
sources. <strong>The</strong> highest source after <strong>the</strong> I.E.P. Agreement is <strong>the</strong> previous<br />
Ministerial Governing Board’s instructions and o<strong>the</strong>r expressions <strong>of</strong> policy or<br />
preference, followed by similar types <strong>of</strong> actions <strong>of</strong> <strong>the</strong> Board at <strong>of</strong>ficial level.<br />
At times this background is supplemented by <strong>the</strong> contributions <strong>of</strong> Members’<br />
representatives participating in special “brainstorming” discussions, usually<br />
organized on a particular topic <strong>of</strong> current programme interest, such as coal,<br />
<strong>the</strong> environment or non-Member relations. Input from Members may come<br />
in a variety <strong>of</strong> o<strong>the</strong>r forms, such as <strong>of</strong>ficial or un<strong>of</strong>ficial communications<br />
orally or in writing to <strong>the</strong> Secretariat. In turn <strong>the</strong> Secretariat is ano<strong>the</strong>r<br />
important source <strong>of</strong> programme suggestions, for <strong>the</strong> senior sectorial Staff in<br />
<strong>the</strong> Secretariat prepare elements for <strong>the</strong>ir respective sectors, taking into<br />
account what is known from <strong>the</strong> o<strong>the</strong>r sources. <strong>The</strong>se contributions are<br />
forwarded in early summer <strong>of</strong> each year to <strong>the</strong> Deputy Executive Director’s<br />
Office where <strong>the</strong> preparation <strong>of</strong> <strong>the</strong> draft Programme is co-ordinated. <strong>The</strong><br />
draft is submitted to <strong>the</strong> Executive Director for discussion with <strong>IEA</strong><br />
Directors and with <strong>the</strong> OECD. After receiving <strong>the</strong> Executive Director’s<br />
approval, <strong>the</strong> draft Programme <strong>of</strong> Work is joined with <strong>the</strong> draft Budget as a<br />
single document for distribution by 1 October <strong>of</strong> each year as required for<br />
<strong>the</strong> draft Budget under Article 64.3 <strong>of</strong> <strong>the</strong> I.E.P. Agreement.<br />
In recent years <strong>the</strong> Executive Director has met with Energy Advisors<br />
in Delegations during this period in order to provide <strong>the</strong>m with an early<br />
explanation <strong>of</strong> <strong>the</strong> proposals, to enable <strong>the</strong>m to transmit <strong>the</strong> views <strong>of</strong> <strong>the</strong>ir<br />
governments if desired at that early stage, and to have <strong>the</strong> benefit <strong>of</strong> an<br />
exchange <strong>of</strong> views which <strong>the</strong> Energy Advisors could reflect back to <strong>the</strong>ir<br />
authorities in capitals. This exploratory phase <strong>of</strong> <strong>the</strong> process is designed to<br />
facilitate <strong>the</strong> preparations in capitals for <strong>the</strong> Governing Board’s discussion<br />
on <strong>the</strong> draft Programme, which usually takes place at <strong>the</strong> Board’s next<br />
meeting in <strong>the</strong> course <strong>of</strong> <strong>the</strong> month <strong>of</strong> October.<br />
At <strong>the</strong> October meeting <strong>the</strong> Board thoroughly discusses <strong>the</strong> draft<br />
Programme. At <strong>the</strong> conclusion <strong>of</strong> that discussion, <strong>the</strong> Board typically notes<br />
<strong>the</strong> document containing <strong>the</strong> draft Programme <strong>of</strong> Work, approves “<strong>the</strong><br />
directions <strong>of</strong> work contained <strong>the</strong>rein” (thus reserving its final approval to a<br />
later meeting when <strong>the</strong> views <strong>of</strong> <strong>the</strong> Budget Committee on budgetary<br />
implications would be known), and refers <strong>the</strong> draft Programme and Budget<br />
to that Committee. <strong>The</strong> Budget Committee considers “<strong>the</strong> resources<br />
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equired” for <strong>the</strong> Budget to fulfill <strong>the</strong> Programme <strong>of</strong> Work, “taking into<br />
account <strong>the</strong> Governing Board’s discussion <strong>of</strong> <strong>the</strong> Programme <strong>of</strong> Work, and<br />
also to carry out <strong>the</strong> work <strong>of</strong> <strong>the</strong> Organisation in <strong>the</strong> energy field”. <strong>The</strong><br />
Committee is <strong>the</strong>n requested “to convene at its earliest convenience and to<br />
submit its recommendations” on <strong>the</strong> draft Budget to <strong>the</strong> Board at its next<br />
meeting [For a recent example <strong>of</strong> <strong>the</strong> pattern <strong>of</strong> Board conclusions at this<br />
stage, see <strong>IEA</strong>/GB(93)57, Item 3]. <strong>The</strong>se actions usually take place without<br />
any significant change in <strong>the</strong> draft Programme <strong>of</strong> Work.<br />
At <strong>the</strong> Governing Board’s next meeting, usually in December, <strong>the</strong><br />
Board has before it <strong>the</strong> report <strong>of</strong> <strong>the</strong> Budget Committee and its<br />
recommendations given in response to <strong>the</strong> mandate mentioned above, as<br />
well as <strong>the</strong> draft Programme <strong>of</strong> Work and <strong>the</strong> draft Budget and any<br />
proposed modifications to <strong>the</strong> draft Budget. At this meeting <strong>the</strong> Programme<br />
is <strong>of</strong>ficially adopted by <strong>the</strong> Board, acting in accordance with its procedures.<br />
<strong>The</strong> draft Programme has almost always been adopted on <strong>the</strong> basis <strong>of</strong><br />
consensus, without a formally recorded vote, and without discussion <strong>of</strong> <strong>the</strong><br />
applicable voting rule. Since <strong>the</strong> decision adopting <strong>the</strong> Programme would<br />
qualify as a management question, <strong>the</strong> applicable voting rule would be<br />
I.E.P. “majority” under Article 61.1 <strong>of</strong> <strong>the</strong> Agreement, <strong>the</strong> same rule that<br />
applies to <strong>the</strong> adoption <strong>of</strong> <strong>IEA</strong> Budgets.<br />
Immediately after <strong>the</strong> Governing Board acts on <strong>the</strong> Programme <strong>of</strong><br />
Work and Budget at its December meeting each year, <strong>the</strong>se documents are<br />
transmitted to <strong>the</strong> OECD Council. This is done typically in <strong>the</strong> form <strong>of</strong> a<br />
“Note by <strong>the</strong> Governing Board”, briefly recalling <strong>the</strong> background<br />
information and stating, as in <strong>the</strong> following example for <strong>1994</strong>:<br />
<strong>The</strong> Agency’s Programme <strong>of</strong> Work [<strong>IEA</strong>/GB(93)44, Annex I<br />
and Corrigendum] is hereby transmitted to <strong>the</strong> Council for<br />
information; and <strong>the</strong> Agency’s <strong>1994</strong> Budget [<strong>IEA</strong>/GB(93)63,<br />
Attachment B and Corrigendum] is hereby submitted to <strong>the</strong><br />
Council for adoption [Emphasis added].<br />
For <strong>1994</strong> that statement appeared in document C/PWB(93)94/ADD1 and<br />
follows established <strong>IEA</strong>/OECD practice.<br />
Since <strong>the</strong> Governing Board’s adoption <strong>of</strong> <strong>the</strong> Programme Work is<br />
dispositive, no fur<strong>the</strong>r action by <strong>the</strong> Council is required. For <strong>the</strong> Budget,<br />
however, <strong>the</strong> Council’s decision integrating <strong>the</strong> <strong>IEA</strong> Budget into <strong>the</strong> OECD<br />
Budget pursuant to <strong>the</strong> Council Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong><br />
Agency is required for formal reasons. <strong>IEA</strong> Budgets and <strong>the</strong> special rules<br />
for adopting <strong>the</strong>m will be examined in <strong>the</strong> Section which follows.<br />
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C. Budgets<br />
1. Function<br />
Budgets <strong>of</strong> <strong>the</strong> Agency serve <strong>the</strong> principal purpose <strong>of</strong> providing <strong>the</strong> financial<br />
and operational instruments for realizing <strong>the</strong> corresponding Programmes <strong>of</strong><br />
Work. In <strong>the</strong> course <strong>of</strong> preparing <strong>the</strong> Programme <strong>of</strong> Work <strong>the</strong> Secretariat also<br />
considers <strong>the</strong> budgetary implications <strong>of</strong> <strong>the</strong> Programme and seeks from <strong>the</strong><br />
outset <strong>of</strong> <strong>the</strong> process to plan <strong>the</strong> two toge<strong>the</strong>r in a coherent and realistic way.<br />
Hence throughout <strong>the</strong> <strong>IEA</strong> process <strong>of</strong> reflection, preparation and adoption <strong>of</strong><br />
both <strong>the</strong> Programme and <strong>the</strong> Budget, <strong>the</strong> one accompanies <strong>the</strong> o<strong>the</strong>r.<br />
<strong>The</strong> technical function <strong>of</strong> <strong>the</strong> Budget is not spelled out in <strong>the</strong> I.E.P.<br />
Agreement but it is described broadly in Article 10(a) <strong>of</strong> <strong>the</strong> Council<br />
Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency, as follows:<br />
<strong>The</strong> budget <strong>of</strong> <strong>the</strong> Agency shall form part <strong>of</strong> <strong>the</strong> Budget <strong>of</strong> <strong>the</strong><br />
Organisation and expenditure <strong>of</strong> <strong>the</strong> Agency shall be charged against<br />
<strong>the</strong> appropriations authorised for it under Part II <strong>of</strong> <strong>the</strong> Budget which<br />
shall include appropriate Budget estimates and provisions for<br />
all expenditure necessary for <strong>the</strong> operation <strong>of</strong> <strong>the</strong> Agency.<br />
Since it is ultimately part <strong>of</strong> <strong>the</strong> OECD Part II Budget, <strong>the</strong> Agency’s Budget serves<br />
<strong>the</strong> purposes <strong>of</strong> <strong>the</strong> OECD Budgets as described in <strong>the</strong> Organisation’s Financial<br />
Regulations: to accord “<strong>the</strong> necessary commitment authority” and to make “<strong>the</strong><br />
necessary appropriations” for <strong>the</strong> functioning <strong>of</strong> <strong>the</strong> Agency and <strong>the</strong> carrying out<br />
<strong>of</strong> its activities [Article 3 <strong>of</strong> <strong>the</strong> Financial Regulations <strong>of</strong> <strong>the</strong> Organisation].<br />
Article 3 defines those terms for purposes <strong>of</strong> <strong>the</strong> Regulations in this way:<br />
. . . <strong>the</strong> term “commitment authority” means <strong>the</strong> authority conferred<br />
upon <strong>the</strong> Secretary-General to enter into obligations in <strong>the</strong> name <strong>of</strong> <strong>the</strong><br />
Organisation in <strong>the</strong> course <strong>of</strong> <strong>the</strong> financial year. <strong>The</strong> term “appropriation”<br />
means <strong>the</strong> sum <strong>of</strong> money which <strong>the</strong> Council authorises <strong>the</strong><br />
Secretary-General to disburse in <strong>the</strong> course <strong>of</strong> <strong>the</strong> financial year in<br />
respect <strong>of</strong> <strong>the</strong> expenses to which such appropriation relates.<br />
<strong>The</strong> Budgets also serve less formal purposes for <strong>the</strong> Agency. <strong>The</strong>y require Members<br />
and <strong>the</strong> Secretariat to reflect thoroughly and carefully upon <strong>the</strong> right balance <strong>of</strong><br />
Programme <strong>of</strong> Work and finance, to join political considerations to <strong>the</strong> operational<br />
and <strong>the</strong> financial ones, to bear in mind what was done in <strong>the</strong> current year while<br />
considering what might be done in <strong>the</strong> next year, and to adapt <strong>the</strong> levels and<br />
qualifications <strong>of</strong> Staff and <strong>the</strong> structure <strong>of</strong> <strong>the</strong> Secretariat (Offices, Divisions and<br />
285
o<strong>the</strong>r units) to ensure that <strong>the</strong> Agency’s work will be done in <strong>the</strong> most coherent,<br />
effective and economic manner possible. On each category <strong>of</strong> expenditure, <strong>the</strong><br />
Budget process brings into focus <strong>the</strong> distribution and levels <strong>of</strong> expenditure for<br />
<strong>the</strong> current and <strong>the</strong> coming year and promotes reflection on those details as well<br />
as on <strong>the</strong> broader range <strong>of</strong> activities contained in <strong>the</strong> Programme <strong>of</strong> Work.<br />
2. Content and Style<br />
<strong>The</strong> draft Budget is a technical and detailed document which has been prepared<br />
since <strong>the</strong> Agency’s beginnings by <strong>the</strong> Secretariat with <strong>the</strong> extensive assistance <strong>of</strong><br />
<strong>the</strong> budget and finance experts <strong>of</strong> <strong>the</strong> OECD Secretariat. As a matter <strong>of</strong> practice,<br />
<strong>the</strong> form <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Budget largely follows OECD requirements outlined in <strong>the</strong><br />
OECD Financial Regulations. In <strong>the</strong>ir basic format and presentation <strong>IEA</strong><br />
Budgets have changed little since <strong>the</strong> 1970s when <strong>the</strong> pattern was established.<br />
Each year <strong>the</strong> Executive Director’s Programme <strong>of</strong> Work and Budget proposal<br />
document contains a draft entry in <strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong> Governing Board stating <strong>the</strong><br />
action requested, <strong>the</strong> report <strong>of</strong> <strong>the</strong> Budget Committee (Attachment A), <strong>the</strong> Budget<br />
tables and a chart showing <strong>the</strong> Organisation <strong>of</strong> <strong>the</strong> Secretariat [for <strong>1994</strong> this is<br />
document <strong>IEA</strong>/GB(93)63]. <strong>The</strong> strictly budgetary part <strong>of</strong> <strong>the</strong> document (Attachment<br />
B) contains technical background information, tabular summaries <strong>of</strong> proposed<br />
appropriations and <strong>of</strong> proposed financing compared to <strong>the</strong> previous year, <strong>the</strong><br />
reproduction <strong>of</strong> <strong>the</strong> scale <strong>of</strong> contributions for <strong>the</strong> previous year (<strong>the</strong> scale for <strong>the</strong> new<br />
budgetary year would not be available for a few months into <strong>the</strong> new year), and a<br />
table (Table I) summarizing <strong>the</strong> proposed authorizations for each Item in <strong>the</strong> Budget.<br />
<strong>The</strong> Table I summary is <strong>the</strong> heart <strong>of</strong> <strong>the</strong> appropriation side <strong>of</strong> <strong>the</strong> Budget.<br />
It shows <strong>the</strong> authorization levels for <strong>the</strong> budgetary year and for <strong>the</strong> previous year<br />
(at <strong>the</strong> prices <strong>of</strong> <strong>the</strong> previous year) as well as <strong>the</strong> increases or decreases in<br />
resources required for <strong>the</strong> new budgetary year compared to <strong>the</strong> preceding one,<br />
provisions for adjustments for <strong>the</strong> new year and <strong>the</strong> final appropriations<br />
proposed, all set out in separate columns. <strong>The</strong> active Items contained in <strong>the</strong><br />
<strong>1994</strong> Budget were: Permanent Staff; Official Travel; Consultants, Project Staff;<br />
Meetings, Interpretation; Conferences; Entertainment Expenses; Operating<br />
Expenditure; General OECD Administration; Documentation; Translations,<br />
Documents, Publications; Miscellaneous and Unforeseen Expenditure; Capital<br />
Expenditure; Information Technology Equipment; Security; Public Information;<br />
and Relations with European Economies in Transition. Included in Attachment<br />
A to <strong>the</strong> Budget [<strong>IEA</strong>/GB(93)63] are detailed notes on a number <strong>of</strong> budgetary<br />
questions, a list <strong>of</strong> consultant/project staff, principal projects, a list <strong>of</strong> conferences,<br />
workshops, and seminars organized or sponsored by <strong>the</strong> Agency, a schedule <strong>of</strong><br />
publications compared to <strong>the</strong> previous year, some sectorial functional descriptions<br />
and details <strong>of</strong> cost elements for <strong>the</strong> European Economies in Transition Item.<br />
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<strong>The</strong> levels <strong>of</strong> <strong>IEA</strong> Budgets have grown steadily since <strong>the</strong> first full year<br />
<strong>IEA</strong> Budget was adopted for 1975, as shown on <strong>the</strong> following Table:<br />
INTERNATIONAL ENERGY AGENCY<br />
TOTAL BUDGET LEVELS 1975 - <strong>1994</strong><br />
YEAR Total Amount <strong>of</strong><br />
<strong>IEA</strong> Budget<br />
1975 FF 21, 785, 400<br />
1976 FF 28, 016, <strong>20</strong>0<br />
1977 FF 31, 473, <strong>20</strong>0<br />
1978 FF 35, 226, 000<br />
1979 FF 38, 465, <strong>20</strong>0<br />
1980 FF 43, 929, 000<br />
1981 FF 54, 825, 400<br />
1982 FF 62, 061, 400<br />
1983 FF 68, 349, <strong>20</strong>0<br />
1984 FF 73, 693, 700<br />
1985 FF 78, 433, 300<br />
1986 FF 82, 942, <strong>20</strong>0<br />
1987 FF 85, 757, 600<br />
1988 FF 89, 864, 500<br />
1989 FF 93, 835, 500<br />
1990 FF 99, 885, 000<br />
1991 FF 111, 005, 500<br />
1992 FF 125, 414, 800<br />
1993 FF 131, 788, <strong>20</strong>0<br />
<strong>1994</strong> FF 136, 578, 300<br />
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<strong>The</strong> <strong>IEA</strong> Budget level changes between 1975 and 1993 represent<br />
approximately a six-fold increase, resulting from <strong>the</strong> expansion <strong>of</strong> <strong>IEA</strong><br />
activities since <strong>the</strong> early formation period and <strong>the</strong> necessity <strong>of</strong> meeting<br />
inflationary increases in costs. This is a little less than <strong>the</strong> rate <strong>of</strong> increase<br />
in OECD Part I Budgets over <strong>the</strong> same period (where <strong>the</strong> increase was from<br />
FF 186,005,132 to FF 1,226,997,597). For <strong>1994</strong> and later years this<br />
comparison might change as a result <strong>of</strong> <strong>the</strong> termination <strong>of</strong> <strong>the</strong> former OECD<br />
Part I Budget contribution to <strong>the</strong> <strong>IEA</strong>, discussed in Section F below.<br />
3. Procedure<br />
<strong>The</strong> preparation <strong>of</strong> <strong>the</strong> draft Budget begins in earnest once <strong>the</strong> Programme<br />
<strong>of</strong> Work takes form and <strong>the</strong> probable lines <strong>of</strong> <strong>the</strong> future work become clear.<br />
Since <strong>the</strong> Budget contains many technical matters depending in many<br />
respects on <strong>the</strong> OECD budgeting practices on costs, <strong>the</strong> expertise <strong>of</strong> <strong>the</strong><br />
OECD in this field is extensively utilized. <strong>The</strong> first draft <strong>of</strong> <strong>the</strong> Budget is<br />
prepared in <strong>the</strong> <strong>IEA</strong> Administrative Unit in co-ordination with <strong>the</strong> Office <strong>of</strong><br />
<strong>the</strong> Deputy Executive Director, with broad consultation with <strong>the</strong> senior<br />
<strong>of</strong>ficials <strong>of</strong> <strong>the</strong> Secretariat and o<strong>the</strong>rs. Once <strong>the</strong> Executive Director has<br />
approved <strong>the</strong> draft, <strong>the</strong> Budget elements are joined with <strong>the</strong> Programme <strong>of</strong><br />
Work for distribution to Delegations by 1 October <strong>of</strong> each year. <strong>The</strong> draft<br />
Budget is <strong>the</strong>n discussed by <strong>the</strong> Executive Director and by <strong>the</strong> Energy<br />
Advisors in Delegations, at <strong>the</strong> meetings described above in connection with<br />
<strong>the</strong> Programme <strong>of</strong> Work.<br />
Careful consideration in <strong>the</strong> Budget Committee is <strong>the</strong> next step in this<br />
process. At its November meeting, <strong>the</strong> Committee considers <strong>the</strong> probable<br />
“outturn” <strong>of</strong> <strong>the</strong> current Budget. In recent years this discussion has covered<br />
not only <strong>the</strong> situation under particular Budget Items and <strong>the</strong> income<br />
situation, but also any additional appropriation necessary to meet<br />
unexpected expenditure in <strong>the</strong> previous year (such as <strong>the</strong> extra expenditure<br />
incurred as a result <strong>of</strong> unexpected increase in demand for <strong>IEA</strong> publications,<br />
which has been met for several years by <strong>the</strong> appropriation <strong>of</strong> unexpected<br />
publication and similar source income). Typically <strong>the</strong> Committee also<br />
comments on <strong>the</strong> general administration <strong>of</strong> <strong>the</strong> Budget, expressing, for<br />
example, its “satisfaction” with <strong>the</strong> “flexibility shown by <strong>the</strong> Secretariat in<br />
adjusting to changing priorities during <strong>the</strong> Financial Year 1991”<br />
[<strong>IEA</strong>/GB(91)68, Attachment A, p. 5] and its “satisfaction” with <strong>the</strong><br />
“flexible and cautious management <strong>of</strong> <strong>the</strong> Budget during <strong>the</strong> financial year<br />
1992” [<strong>IEA</strong>/GB(92)46, Attachment A, p. 5]. Sometimes <strong>the</strong> Committee<br />
makes recommendations to <strong>the</strong> Board on procedures employed in <strong>the</strong><br />
288
preparation and adoption <strong>of</strong> <strong>the</strong> Budgets. In 1983 <strong>the</strong> Committee made a<br />
number <strong>of</strong> such recommendations, including one for early discussions to<br />
take place in <strong>the</strong> Standing Groups and <strong>the</strong> R & D Committee (now <strong>the</strong><br />
“CERT”) on <strong>the</strong>ir respective work programmes, on priorities, on new<br />
activities and activities to be terminated. <strong>The</strong> Committee also recommended<br />
that fur<strong>the</strong>r programme information be conveyed to it by <strong>the</strong> Secretariat<br />
“with particular reference to <strong>the</strong> immediate and longer term resource<br />
implications <strong>of</strong> <strong>the</strong> work programme” [<strong>IEA</strong>/GB(83)69, Item 2(d)(ix) and<br />
Annex II].<br />
<strong>The</strong> Committee examines thoroughly <strong>the</strong> draft Budget for <strong>the</strong><br />
following calendar year, and reports to <strong>the</strong> Governing Board on a number <strong>of</strong><br />
technical questions. <strong>The</strong>se questions have included structural changes in <strong>the</strong><br />
Secretariat, <strong>the</strong> creation <strong>of</strong> new Staff positions, <strong>the</strong> extension <strong>of</strong> posts <strong>of</strong><br />
limited duration, <strong>the</strong> transfer <strong>of</strong> a post from <strong>of</strong>f-Budget to Budget status, <strong>the</strong><br />
funding <strong>of</strong> <strong>the</strong> Emergency Sharing System in <strong>the</strong> event <strong>of</strong> need and a<br />
number <strong>of</strong> o<strong>the</strong>r routine or innovative matters contained in <strong>the</strong> Secretariat’s<br />
proposals. <strong>The</strong> Committee also examines <strong>the</strong> Budget, Item by Item, and<br />
records its specific observations and recommendations on such matters as<br />
<strong>the</strong> vacancy rate, information about consultancy projects and costs, income,<br />
and financing <strong>of</strong> capital equipment over several years beyond <strong>the</strong> budgetary<br />
period. Usually <strong>the</strong> draft Budget is recommended by consensus without<br />
substantial change, although at times modifications have been introduced<br />
by <strong>the</strong> Secretariat. It is not unusual, however, for one or more Members to<br />
reserve <strong>the</strong>ir positions or to request that <strong>the</strong>ir respective views be noted in<br />
<strong>the</strong> Committee’s Report. <strong>The</strong> Secretariat <strong>of</strong>ten resolves such questions<br />
bilaterally with <strong>the</strong> interested Members and seeks to present as wide a<br />
consensus as possible to <strong>the</strong> Governing Board, which reviews <strong>the</strong><br />
Committee’s Report toge<strong>the</strong>r with <strong>the</strong> draft Budget soon <strong>the</strong>reafter.<br />
<strong>The</strong> final Budget is adopted by <strong>the</strong> Governing Board in early<br />
December <strong>of</strong> each year as part <strong>of</strong> <strong>the</strong> combined Programme <strong>of</strong> Work and<br />
Budget described above. Following <strong>the</strong> discussion in <strong>the</strong> Board, <strong>the</strong> Budget<br />
has been adopted almost always by consensus, although Article 64.3<br />
requires only an I.E.P. majority (60 per cent <strong>of</strong> <strong>the</strong> total combined voting<br />
weights and 50 per cent <strong>of</strong> <strong>the</strong> general voting weights cast; i.e. with <strong>the</strong><br />
present membership and with Norway voting, at least 102 combined voting<br />
weights cast by at least half <strong>of</strong> <strong>the</strong> Members). <strong>The</strong> Governing Board has not<br />
proceeded to a full, recorded vote on <strong>the</strong> Budget. However, <strong>the</strong> Board<br />
adopted <strong>the</strong> <strong>1994</strong> <strong>IEA</strong> Budget by <strong>the</strong> requisite majority ra<strong>the</strong>r than by <strong>the</strong><br />
traditional Agency consensus practice [See Chapter V, Section A-13 above).<br />
For <strong>the</strong> 1975 Budget, <strong>the</strong> decision was also adopted by majority; in response<br />
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to a request to defer <strong>the</strong> decision, <strong>the</strong> Chairman asked around <strong>the</strong> table for<br />
Members’ views Delegation by Delegation, and announced that <strong>the</strong> Budget<br />
was established as soon as <strong>the</strong> requisite majority appeared.<br />
<strong>The</strong> Governing Board <strong>the</strong>n transmits <strong>the</strong> Budget to <strong>the</strong> OECD Council<br />
for adoption into Part II <strong>of</strong> <strong>the</strong> OECD Budget [See for <strong>the</strong> <strong>1994</strong> Budget, <strong>the</strong><br />
Note by <strong>the</strong> Governing Board, C/PWB(93)94/ADD1]; this is a formality,<br />
but an important one [<strong>The</strong> procedure is described above in connection with<br />
<strong>the</strong> Programme <strong>of</strong> Work]. This is a formality in <strong>the</strong> sense that <strong>the</strong> Council<br />
takes that decision when <strong>the</strong> <strong>IEA</strong> Members who voted for <strong>the</strong> Budget in <strong>the</strong><br />
Governing Board also give <strong>the</strong>ir agreement to it in <strong>the</strong> Council [as provided<br />
in Article 10(b) <strong>of</strong> <strong>the</strong> Decision <strong>of</strong> <strong>the</strong> Council on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong><br />
Agency, discussed below in Section D]. <strong>The</strong> formal procedure <strong>of</strong> adoption<br />
<strong>of</strong> <strong>the</strong> Budget into Part II <strong>of</strong> <strong>the</strong> OECD Budget is a necessary consequence <strong>of</strong><br />
<strong>the</strong> relationship between <strong>the</strong> two institutions and <strong>of</strong> Article 10(a) <strong>of</strong> <strong>the</strong><br />
Council Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency which makes specific<br />
provision to that effect.<br />
<strong>The</strong> <strong>IEA</strong>’s Programmes <strong>of</strong> Work and Budgets for each year have<br />
always been adopted in final form before <strong>the</strong> end <strong>of</strong> <strong>the</strong> previous calendar<br />
year, to enable <strong>the</strong> Agency in January to get <strong>of</strong>f to a smooth start with its<br />
Programme and budgetary appropriations in place and with <strong>the</strong> necessary<br />
financing clearly identified.<br />
D. Governing Board Functions and<br />
Procedures<br />
<strong>The</strong> critical role <strong>of</strong> <strong>the</strong> Governing Board in making financial decisions for<br />
<strong>the</strong> Agency has been apparent in <strong>the</strong> foregoing discussion <strong>of</strong> this Chapter.<br />
<strong>The</strong> Board’s authority in this as well as o<strong>the</strong>r sectors is discussed generally<br />
in Chapter V above.<br />
In <strong>the</strong> I.E.P. Agreement broad financial authority is set forth in Article<br />
64 which provides for decisions to be made on <strong>the</strong> scale <strong>of</strong> contributions<br />
[paragraph 1], for <strong>the</strong> Board to adopt <strong>the</strong> Budgets, including personnel<br />
requirements [paragraph 3], and for <strong>the</strong> Board to take “all o<strong>the</strong>r necessary<br />
decisions regarding <strong>the</strong> financial administration <strong>of</strong> <strong>the</strong> Agency” [paragraph 4].<br />
<strong>The</strong> authority granted in <strong>the</strong>se provisions is extended by <strong>the</strong> general power<br />
conferred upon <strong>the</strong> Board to adopt “financial regulations” and by <strong>the</strong><br />
Executive Director’s power to act in accordance with those regulations in<br />
submitting a draft Budget to <strong>the</strong> Governing Board each year [Article 64.3].<br />
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<strong>The</strong> combination <strong>of</strong> <strong>the</strong>se paragraphs has conferred upon <strong>the</strong> Governing<br />
Board a plenary and autonomous power to regulate <strong>the</strong> financial policy and<br />
administration <strong>of</strong> <strong>the</strong> Agency and to make all <strong>the</strong> appropriate implementing<br />
decisions.<br />
<strong>The</strong> financial autonomy <strong>of</strong> <strong>the</strong> Agency in relation to <strong>the</strong> OECD<br />
Council was a paramount consideration and indeed a condition sine qua<br />
non for <strong>the</strong> founders <strong>of</strong> <strong>the</strong> Agency in deciding to establish <strong>the</strong> Agency in<br />
<strong>the</strong> OECD in place <strong>of</strong> setting up an entirely separate institution in ano<strong>the</strong>r<br />
location. Autonomy in financial matters was a particularly important<br />
element <strong>of</strong> <strong>the</strong> Agency’s general autonomy, for <strong>the</strong> Agency countries<br />
required institutional arrangements to enable <strong>the</strong>m to determine those<br />
matters alone in <strong>the</strong> face <strong>of</strong> an OECD membership <strong>the</strong>n including eight<br />
Members which could not immediately join <strong>the</strong> Agency. This was<br />
complicated by <strong>the</strong> need for <strong>the</strong> OECD to have <strong>the</strong> <strong>IEA</strong> Budget integrated<br />
into <strong>the</strong> OECD budget system which required “mutual agreement <strong>of</strong> all <strong>the</strong><br />
Members” <strong>of</strong> <strong>the</strong> OECD under Article 6.1, “Unless <strong>the</strong> Organisation<br />
o<strong>the</strong>rwise agrees unanimously for special cases”.<br />
While agreement <strong>of</strong> all <strong>the</strong> Members was and remains <strong>the</strong> rule for<br />
decision in <strong>the</strong> OECD, <strong>the</strong> <strong>IEA</strong> needed <strong>the</strong> greater flexibility and<br />
representation <strong>of</strong> economic interests afforded by <strong>the</strong> system <strong>of</strong> weighted<br />
majority adopted in Articles 61 and 62 <strong>of</strong> <strong>the</strong> I.E.P. Agreement [See Chapter<br />
V, Section 13 above). Specifically referring to budgetary and o<strong>the</strong>r financial<br />
decisions, Articles 64.3 and 64.4 provided for decisions by <strong>the</strong> I.E.P.<br />
“majority”. If a majority in <strong>the</strong> Governing Board adopted an <strong>IEA</strong> Budget,<br />
that decision risked uncertainty in <strong>the</strong> OECD Council if any <strong>IEA</strong> country on<br />
<strong>the</strong> minority side <strong>of</strong> that decision or any <strong>of</strong> <strong>the</strong> eight non-Members <strong>of</strong> <strong>IEA</strong><br />
were to decline to give its agreement. It could not be entirely excluded that<br />
<strong>the</strong> views <strong>of</strong> representatives in <strong>the</strong> Governing Board might differ from those<br />
in <strong>the</strong> OECD Council. To resolve those uncertainties <strong>the</strong> <strong>IEA</strong> founding<br />
Members proposed to <strong>the</strong> Council a special formula whereby <strong>the</strong> Board’s<br />
decision would be smoothly transformed into an OECD Council decision<br />
without concerns about possible disruption. That was done under <strong>the</strong><br />
“special cases” rule <strong>of</strong> OECD Convention Article 6.1 [quoted above] in <strong>the</strong><br />
Council’s adoption <strong>of</strong> <strong>the</strong> following provision in Article 10(b) <strong>of</strong> <strong>the</strong> Decision<br />
on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency:<br />
<strong>The</strong> Governing Board shall submit <strong>the</strong> annual and o<strong>the</strong>r budget<br />
proposals <strong>of</strong> <strong>the</strong> Agency to <strong>the</strong> Council for adoption by agreement<br />
<strong>of</strong> those Participating Countries <strong>of</strong> <strong>the</strong> Agency which voted in<br />
<strong>the</strong> Governing Board to submit <strong>the</strong> proposals to <strong>the</strong> Council.<br />
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Under this safeguard provision <strong>the</strong> budgetary autonomy <strong>of</strong> <strong>the</strong> Agency has<br />
been successfully preserved since <strong>1974</strong>. In December <strong>of</strong> each year <strong>the</strong><br />
Board adopts <strong>the</strong> Budget for <strong>the</strong> ensuing year, formally by majority and in<br />
practice by consensus, and it transmits <strong>the</strong> Budget to <strong>the</strong> OECD Council<br />
where it is shortly <strong>the</strong>reafter adopted into <strong>the</strong> OECD Budget, always<br />
without difficulty and <strong>of</strong>ten without discussion. That special formula had<br />
perhaps <strong>the</strong> greatest importance for <strong>the</strong> <strong>IEA</strong> in its early years, when a<br />
number <strong>of</strong> OECD Members had not yet joined <strong>the</strong> Agency and <strong>the</strong>y<br />
<strong>the</strong>oretically could have disturbed or blocked <strong>the</strong> adoption <strong>of</strong> <strong>IEA</strong> Budgets<br />
in <strong>the</strong> Council, but <strong>the</strong>re has never been any expression <strong>of</strong> opposition to <strong>IEA</strong><br />
Budgets in <strong>the</strong> Council, and now in <strong>the</strong> OECD only Iceland is not a Member<br />
<strong>of</strong> <strong>the</strong> <strong>IEA</strong>. However, in <strong>the</strong> event that <strong>the</strong> future should bring o<strong>the</strong>r<br />
differences between <strong>the</strong> OECD and <strong>the</strong> <strong>IEA</strong> membership, <strong>the</strong> procedure for<br />
adopting <strong>the</strong> <strong>IEA</strong> Budget in <strong>the</strong> OECD might take on renewed practical<br />
significance.<br />
In <strong>the</strong> Council Decision Establishing <strong>the</strong> Agency [C(74)<strong>20</strong>3(Final)],<br />
<strong>the</strong> I.E.P. Agreement’s broad grant <strong>of</strong> financial and administrative powers to<br />
<strong>the</strong> Governing Board is fully recognized and is complemented by several<br />
provisions in Article 10 relating to OECD procedures. Article 10(a) <strong>of</strong> that<br />
Decision provides for <strong>the</strong> <strong>IEA</strong> Budget to be part <strong>of</strong> <strong>the</strong> Budget <strong>of</strong> <strong>the</strong><br />
Organisation under its Part II. <strong>The</strong>re is also provision for each Agency<br />
Member’s share in financing to be fixed by <strong>the</strong> Governing Board and for<br />
special expenses incurred in connection with <strong>the</strong> activities referred to in<br />
Article 11 to be shared among <strong>the</strong> Agency Members “in such proportions as<br />
shall be determined by unanimous agreement <strong>of</strong> those countries”. Under<br />
Article 10(a) <strong>the</strong> Board is to “designate an organ <strong>of</strong> <strong>the</strong> Agency to advise <strong>the</strong><br />
Governing Board as required on <strong>the</strong> financial administration <strong>of</strong> <strong>the</strong> Agency<br />
and to give its opinion on <strong>the</strong> annual and o<strong>the</strong>r budget proposals submitted<br />
to <strong>the</strong> Governing Board”, thus ensuring that <strong>the</strong> Board will be advised by its<br />
own budget committee (<strong>the</strong> <strong>IEA</strong> Committee on Budget and Expenditure)<br />
ra<strong>the</strong>r than by <strong>the</strong> Budget Committee <strong>of</strong> <strong>the</strong> OECD. <strong>The</strong> Governing Board’s<br />
power to accept voluntary contributions and grants is expressly recognized<br />
in Article 10(c), as is <strong>the</strong> automatic carry forward <strong>of</strong> certain special activity<br />
appropriations from one financial year to <strong>the</strong> ensuing financial year [See<br />
Article 10(d)].<br />
It should also be recalled that <strong>the</strong> I.E.P. Agreement confers legislative<br />
powers over financial questions solely upon <strong>the</strong> Governing Board. Although<br />
<strong>the</strong> Board is clearly enabled to delegate powers to o<strong>the</strong>r bodies <strong>of</strong> <strong>the</strong><br />
Agency [I.E.P. Article 51.3] and to <strong>the</strong> Executive Director [See Chapter VI,<br />
Section E above], <strong>the</strong> Board has done so occasionally also to <strong>the</strong> <strong>IEA</strong> Budget<br />
292
Committee [See Section E below] and sparingly in a few administrative<br />
areas to <strong>the</strong> Executive Director.<br />
In operational terms <strong>the</strong> financial administration <strong>of</strong> <strong>the</strong> Agency is<br />
vested in <strong>the</strong> Governing Board, assisted by <strong>the</strong> Committee on Budget and<br />
Expenditure where each Member has been represented, and by <strong>the</strong> Executive<br />
Director who brings considerable influence to bear upon <strong>the</strong> entire financial<br />
life <strong>of</strong> <strong>the</strong> Agency. This influence is manifest in <strong>the</strong> Executive Director’s<br />
proposals to <strong>the</strong> Board, which are developed with <strong>the</strong> assistance <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
Secretariat and <strong>the</strong> OECD financial and budgetary experts and o<strong>the</strong>rs. <strong>The</strong><br />
Executive Director has always taken a special interest in financial questions<br />
and participates directly and actively at each stage <strong>of</strong> <strong>the</strong> process leading to<br />
<strong>the</strong> adoption <strong>of</strong> <strong>the</strong> Budget and o<strong>the</strong>r financial decisions.<br />
E. Committee on Budget and<br />
Expenditure (BC)<br />
This Committee, commonly referred to as <strong>the</strong> <strong>IEA</strong> Budget Committee, was<br />
created by <strong>the</strong> Governing Board at its first meeting on 18-19 November<br />
<strong>1974</strong>. Its mandate was foreshadowed by <strong>the</strong> Council Decision on <strong>the</strong><br />
Establishment <strong>of</strong> <strong>the</strong> Agency [Article 10(a)] which referred to <strong>the</strong><br />
designation <strong>of</strong> an organ to advise <strong>the</strong> Board on <strong>the</strong> financial administration<br />
<strong>of</strong> <strong>the</strong> Agency and to give its opinions on Budget proposals. As established<br />
by <strong>the</strong> Governing Board [<strong>IEA</strong>/GB(74)9(1st Revision), Item 12], <strong>the</strong><br />
mandate provides specifically for <strong>the</strong> Committee<br />
. . . to advise <strong>the</strong> Governing Board on financial administration<br />
<strong>of</strong> <strong>the</strong> Agency and to give its opinion on <strong>the</strong> Annual and o<strong>the</strong>r<br />
budget proposals submitted to <strong>the</strong> Governing Board.<br />
<strong>The</strong> Board also instructed <strong>the</strong> Committee to “establish a small working<br />
group which <strong>the</strong> Executive Director could consult regarding expenditure<br />
necessary in <strong>the</strong> fulfilment <strong>of</strong> <strong>the</strong> tasks <strong>of</strong> <strong>the</strong> Agency” [<strong>IEA</strong>/GB(74)9(1st<br />
Revision), Item 10] and <strong>the</strong> Committee soon did this [<strong>IEA</strong>/BC(74)1,<br />
paragraph 6(5)]. <strong>The</strong> Board later noted that <strong>the</strong> Working Group “would not<br />
exclude any Agency country which wishes to participate in its work”<br />
[<strong>IEA</strong>/GB(74)11(1st Revision), Item 5(o)]. This Group became known as<br />
<strong>the</strong> “Open Ended Working Group”, but it did not play a major role in <strong>IEA</strong><br />
budgetary developments and has not met as such for many years.<br />
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<strong>The</strong> <strong>IEA</strong> Budget Committee normally meets twice each year, once in<br />
mid-year and again toward <strong>the</strong> end <strong>of</strong> <strong>the</strong> year, usually in November. <strong>The</strong><br />
main purpose <strong>of</strong> <strong>the</strong> November meetings is to give <strong>the</strong> Committee’s opinion<br />
on <strong>the</strong> draft Budget <strong>of</strong> <strong>the</strong> Agency and on o<strong>the</strong>r matters <strong>of</strong> current interest.<br />
Those meetings are briefly described in Section B-3 above. A few words<br />
should now be said about <strong>the</strong> mid-year meetings, which take up any<br />
budgetary question <strong>of</strong> current interest, as well as two regularly recurring<br />
topics: (1) <strong>the</strong> closing <strong>of</strong> accounts for <strong>the</strong> previous year and (2) estimated<br />
expenditure under <strong>the</strong> current Budget. Income and expenditure results are<br />
outlined and compared, with a financial statement <strong>of</strong> <strong>the</strong> final result for <strong>the</strong><br />
year. Outcome as respects each Budget Item is shown, as are transfers from<br />
one Item to ano<strong>the</strong>r and <strong>the</strong> reasons for under expenditure and over<br />
expenditure, as <strong>the</strong> case may be. Review <strong>of</strong> <strong>the</strong> estimated expenditure<br />
under <strong>the</strong> current Budget gives <strong>the</strong> Secretariat an opportunity to report on<br />
<strong>the</strong> financial situation at <strong>the</strong> mid-year point and gives Delegations an<br />
opportunity to review and to comment on <strong>the</strong> situation at that point,<br />
although <strong>the</strong> data are still necessarily tentative and incomplete. A number<br />
<strong>of</strong> particular and current topics are also normally considered in <strong>the</strong>se<br />
meetings, and <strong>the</strong>y <strong>of</strong> course vary from year to year. In recent years those<br />
current topics have included <strong>the</strong> following, to cite only a few: audits,<br />
procedures for acceptance <strong>of</strong> voluntary contributions and grants, financing<br />
<strong>of</strong> <strong>the</strong> full <strong>IEA</strong> Budget under Part II <strong>of</strong> <strong>the</strong> OECD Budget, increased<br />
transparency <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Budget process and accuracy <strong>of</strong> information,<br />
Secretariat staffing, documentation, use <strong>of</strong> languages, information on<br />
income and impacts <strong>of</strong> membership changes. Overall, <strong>the</strong> function <strong>of</strong> <strong>the</strong><br />
Committee extends beyond such specifics; it also serves effectively as <strong>the</strong><br />
forum for full and frank exchanges between <strong>the</strong> Executive Director and<br />
Members’ representatives on broader questions <strong>of</strong> information, expectations<br />
and future intentions or wishes on financial, administrative and o<strong>the</strong>r<br />
aspects <strong>of</strong> Agency operations.<br />
From <strong>the</strong> beginning <strong>the</strong> Budget Committee has worked effectively<br />
with a minimum <strong>of</strong> procedural preoccupations, in keeping with <strong>the</strong> conduct<br />
<strong>of</strong> business by <strong>the</strong> Governing Board and <strong>the</strong> Standing Groups. <strong>The</strong> mandate<br />
<strong>of</strong> <strong>the</strong> Committee is silent on <strong>the</strong> question <strong>of</strong> procedures, which means <strong>the</strong><br />
Committee follows <strong>the</strong> I.E.P. procedures and those employed by <strong>the</strong><br />
Governing Board, with <strong>the</strong> remainder to be determined by <strong>the</strong> Committee<br />
itself. <strong>The</strong> outcome <strong>of</strong> <strong>the</strong> Committee meetings is contained in its<br />
recommendations and o<strong>the</strong>r actions reported to <strong>the</strong> Board in accordance<br />
with <strong>the</strong> mandate, in its requests to <strong>the</strong> Secretariat for information or o<strong>the</strong>r<br />
actions, sometimes expressing views as to approaches to <strong>the</strong> preparation <strong>of</strong><br />
294
future Budgets, and in its taking note <strong>of</strong> Secretariat reports and information<br />
provided to <strong>the</strong> Committee. <strong>The</strong> Committee does not, in <strong>the</strong> absence <strong>of</strong><br />
delegation from <strong>the</strong> Board, make final decisions on <strong>the</strong> questions before it,<br />
and <strong>the</strong> Board has delegated decision responsibility sparingly [See generally<br />
Chapter V, Section C above; for examples, see <strong>IEA</strong>/GB(75)99, Item 2(d), (l)<br />
and (p) concerning <strong>the</strong> unfreezing <strong>of</strong> posts and funds as well as <strong>the</strong> transfers<br />
<strong>of</strong> funds from meetings and interpretation, and <strong>IEA</strong>/GB(79)49, Item 9(c),<br />
concerning an arrangement for <strong>the</strong> rental <strong>of</strong> data processing equipment].<br />
Although <strong>the</strong> Committee is not known ever to have recorded a formal<br />
vote, at times <strong>the</strong>re have been expressed individual country views which do<br />
not attract a consensus. Those views have sometimes been recorded in <strong>the</strong><br />
Committee’s report to <strong>the</strong> Board or in o<strong>the</strong>r meeting record documents. In<br />
fact <strong>the</strong> Committee concludes on <strong>the</strong> basis <strong>of</strong> consensus, with a statement <strong>of</strong><br />
individual country views or reservations when necessary, a procedure which<br />
has been seen as expediting and enhancing <strong>the</strong> work <strong>of</strong> <strong>the</strong> Committee.<br />
F. Members’ Financing Obligation<br />
<strong>The</strong> legal commitment <strong>of</strong> Agency Members to finance <strong>the</strong> Agency is clearly<br />
stated in Article 64.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement as follows:<br />
<strong>The</strong> expenses <strong>of</strong> <strong>the</strong> Secretariat and all o<strong>the</strong>r common expenses<br />
shall be shared among all Participating Countries according to<br />
a scale <strong>of</strong> contributions elaborated according to <strong>the</strong> principles<br />
and rules set out in <strong>the</strong> Annex to <strong>the</strong> “OECD Resolution <strong>of</strong> <strong>the</strong><br />
Council on Determination <strong>of</strong> <strong>the</strong> Scale <strong>of</strong> Contributions by<br />
Member Countries to <strong>the</strong> Budget <strong>of</strong> <strong>the</strong> Organisation” <strong>of</strong> 10th<br />
December, 1963 [Emphasis added].<br />
Parallel language appears in Article 10(a) <strong>of</strong> <strong>the</strong> Council Decision on <strong>the</strong><br />
Establishment <strong>of</strong> <strong>the</strong> Agency which refers to “all expenditure necessary for<br />
<strong>the</strong> operation <strong>of</strong> <strong>the</strong> Agency” and states that “Each Participating Country’s<br />
share in financing such expenditure shall be fixed by <strong>the</strong> Governing Board”<br />
[Emphasis added].<br />
<strong>IEA</strong> Members’ assessed contributions provide by far <strong>the</strong> largest<br />
portion <strong>of</strong> <strong>the</strong> Agency’s resources. Although <strong>the</strong> foregoing rule quotations<br />
might appear to characterize those contributions as <strong>the</strong> exclusive source <strong>of</strong><br />
income for meeting operating expenses, that has never been <strong>the</strong> case. In<br />
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fact <strong>the</strong> Agency has received resources under four different categories: (1)<br />
assessed contributions <strong>of</strong> <strong>IEA</strong> Members, (2) assessed contributions <strong>of</strong> OECD<br />
Members as a whole until <strong>1994</strong>, (3) voluntary contributions and grants, and<br />
(4) income from sales <strong>of</strong> publications and <strong>the</strong> like as well as income from<br />
services and assistance through exchanges in kind.<br />
In 1993 <strong>the</strong> distribution <strong>of</strong> income among those sources (including<br />
item 3 below which is not counted in <strong>the</strong> 1993 total in <strong>the</strong> Table on p. 287<br />
above) may be summarized as follows:<br />
1. Members’ contributions 108, 572, <strong>20</strong>0 81.9 %<br />
2. OECD contributions 18, 216, 000 13.7 %<br />
3. <strong>Vol</strong>untary contributions 850, 000 0.6 %<br />
4. Income from sales (est.) 5, 000, 000 3.8 %<br />
132, 638, <strong>20</strong>0 100 %<br />
Income in <strong>the</strong> first category is received each year pursuant to <strong>the</strong><br />
application <strong>of</strong> <strong>the</strong> scales <strong>of</strong> contribution described below in Section G.<br />
Income in <strong>the</strong> second category arose at <strong>the</strong> outset <strong>of</strong> <strong>the</strong> Agency when <strong>the</strong><br />
<strong>IEA</strong> took responsibility for most <strong>of</strong> <strong>the</strong> OECD’s prior activities in <strong>the</strong> energy<br />
field, which benefitted <strong>the</strong> entire OECD membership <strong>of</strong> twenty-four<br />
countries and not only <strong>the</strong> <strong>IEA</strong>’s <strong>the</strong>n sixteen Members. In order to fund<br />
that part <strong>of</strong> <strong>the</strong> Agency’s activities beginning in 1975, <strong>the</strong> OECD agreed to<br />
provide from Part I <strong>of</strong> <strong>the</strong> OECD Budget <strong>the</strong> cost <strong>of</strong> 39 personnel posts.<br />
This practice continued each year to 1993. With <strong>the</strong> inclusion <strong>of</strong> <strong>the</strong> entire<br />
<strong>IEA</strong> Budget financing in <strong>the</strong> <strong>IEA</strong> Part II Budget in <strong>1994</strong>, <strong>the</strong> practice <strong>of</strong><br />
OECD as a whole bearing part <strong>of</strong> that financing disappeared [See generally<br />
on this subject, Chapter VI, Section D above].<br />
<strong>The</strong> third category, voluntary contributions and grants, was not<br />
specifically provided for in <strong>the</strong> I.E.P., but it is part <strong>of</strong> general international<br />
organization practice and was foreseen in <strong>the</strong> Council Decision on <strong>the</strong><br />
Establishment <strong>of</strong> <strong>the</strong> Agency [See Article 10(c)]. This funding source and<br />
<strong>the</strong> procedures employed in <strong>the</strong> <strong>IEA</strong> are discussed in Section H below. In<br />
1992 voluntary contributions and grants for specified programme activities<br />
amounted to about FF 5,000,000 representing about four per cent <strong>of</strong><br />
Agency resources; for 1993 <strong>the</strong> total was about FF 850,000 representing<br />
less than one per cent <strong>of</strong> total resources.<br />
In <strong>the</strong> fourth category is found an estimate <strong>of</strong> <strong>the</strong> funding from such<br />
additional sources as sales <strong>of</strong> publications (notably <strong>the</strong> monthly Oil Market<br />
Report), and similar transactions such as sales <strong>of</strong> disks, tapes and o<strong>the</strong>r<br />
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forms <strong>of</strong> intellectual property developed by <strong>the</strong> Secretariat. To this<br />
additional category could be added income from services and resources<br />
derived from exchanges and o<strong>the</strong>r arrangements, <strong>the</strong>re having been<br />
personnel exchanges for limited periods with national administrations and<br />
exchanges <strong>of</strong> intellectual property on a mutually advantageous basis. This<br />
again is a category not mentioned in <strong>the</strong> I.E.P. Agreement, although <strong>the</strong><br />
practice is widespread if not universally applied by international<br />
organizations and was specifically foreseen in <strong>the</strong> Council Decision on <strong>the</strong><br />
Establishment <strong>of</strong> <strong>the</strong> Agency, in Article 10(c) which refers to “payments for<br />
services rendered by <strong>the</strong> Agency”.<br />
<strong>The</strong> foregoing discussion leads to <strong>the</strong> conclusion that governments are<br />
clearly <strong>the</strong> dominant sources <strong>of</strong> <strong>IEA</strong> funding. Though <strong>the</strong> o<strong>the</strong>r sources<br />
discussed above are generally favored in <strong>IEA</strong> practice and are most useful as<br />
far as <strong>the</strong>y go, <strong>the</strong>y do not represent a major source <strong>of</strong> income. Those o<strong>the</strong>r<br />
sources are carefully scrutinized by <strong>the</strong> Governing Board, as are <strong>the</strong> voluntary<br />
contributions “in kind” in <strong>the</strong> form <strong>of</strong> gratuitous secondment or loan <strong>of</strong> staff<br />
from governments. Board approval is obtained as necessary for additional<br />
sources <strong>of</strong> funding or service. For contributions <strong>of</strong> additional funds, <strong>the</strong><br />
Secretariat has in one exceptional case accepted <strong>the</strong> funds prior to Board<br />
authorization, when that was necessary because <strong>of</strong> a contributor’s fiscal year<br />
deadline and <strong>the</strong> Board would not meet before <strong>the</strong> action had to be taken.<br />
But <strong>the</strong> Secretariat has not been authorized to commit or expend such<br />
contributions until <strong>the</strong> Governing Board has made <strong>the</strong> formal appropriation<br />
decision. In this way <strong>the</strong> Member governments maintain control over Agency<br />
funding without concern that <strong>the</strong> Agency might receive significant amounts <strong>of</strong><br />
resources free from Member governments’ control over sources and uses.<br />
G. Scale <strong>of</strong> Contributions<br />
1. Calculation<br />
<strong>The</strong> question <strong>of</strong> apportioning <strong>the</strong> expenses <strong>of</strong> <strong>the</strong> Agency among <strong>the</strong><br />
Members was resolved in accordance with OECD principles and rules. At<br />
<strong>the</strong> Energy Co-ordinating Group which negotiated <strong>the</strong> I.E.P. Agreement at<br />
Brussels in <strong>1974</strong>, <strong>the</strong> founding Members agreed that OECD arrangements<br />
should be followed, but <strong>the</strong>re was some thought that Agency expenses<br />
should be apportioned not on <strong>the</strong> OECD formulation utilizing gross national<br />
product at factor cost, but ra<strong>the</strong>r in proportions more directly related to<br />
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energy criteria. <strong>The</strong> operative text which was agreed in Brussels appears in<br />
Article 64.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement:<br />
<strong>The</strong> expenses <strong>of</strong> <strong>the</strong> Secretariat and all o<strong>the</strong>r common expenses<br />
shall be shared among all Participating Countries according to<br />
a scale <strong>of</strong> contributions elaborated according to <strong>the</strong> principles<br />
and rules set out in <strong>the</strong> Annex to <strong>the</strong> “OECD Resolution <strong>of</strong> <strong>the</strong><br />
Council on Determination <strong>of</strong> <strong>the</strong> Scale <strong>of</strong> Contributions by<br />
Member Countries to <strong>the</strong> Budget <strong>of</strong> <strong>the</strong> Organisation” <strong>of</strong> 10th<br />
December, 1963. After <strong>the</strong> first year <strong>of</strong> application <strong>of</strong> this<br />
Agreement, <strong>the</strong> Governing Board shall review this scale <strong>of</strong><br />
contributions and, acting by unanimity, shall decide upon any<br />
appropriate changes in accordance with Article 73 [Article 73<br />
deals with amendments to <strong>the</strong> Agreement].<br />
<strong>The</strong> principles and rules contained in <strong>the</strong> 1963 Council Resolution<br />
[C(63)155(Final), Annex, as amended by C(87)63(Final)] may be<br />
summarized as follows:<br />
■<br />
■<br />
■<br />
■<br />
■<br />
contributions are assessed on <strong>the</strong> basis <strong>of</strong> Members’ “capacity to pay”<br />
as determined with reference to national income statistics.<br />
this is calculated on <strong>the</strong> basis <strong>of</strong> gross national product at factor cost,<br />
less 10 per cent for depreciation, utilizing standard definitions, taking<br />
<strong>the</strong> average <strong>of</strong> <strong>the</strong> most recent three years for which figures for all<br />
Members are available, and using a common currency unit calculated<br />
on <strong>the</strong> basis <strong>of</strong> <strong>the</strong> average <strong>of</strong>ficial rates for those years.<br />
a scale <strong>of</strong> “taxable incomes” is determined by deducting $100 per<br />
capita from <strong>the</strong> national income <strong>of</strong> each Member.<br />
subject to <strong>the</strong> adjustments described below, a Member’s percentage<br />
contribution shall be equal to <strong>the</strong> “proportion that its ‘taxable<br />
income’ bears to <strong>the</strong> total ‘taxable income’ for all Member countries”.<br />
<strong>the</strong> adjustments are: no country shall pay more than 25 per cent or<br />
less than 0.10 per cent <strong>of</strong> <strong>the</strong> entire Budget <strong>of</strong> <strong>the</strong> Organisation;<br />
moreover, <strong>the</strong> “rate <strong>of</strong> contribution <strong>of</strong> any Member country cannot be<br />
increased by more than 10 per cent year on year in relative terms, or<br />
by more than 0.75 percentage point in absolute terms”.<br />
<strong>The</strong> calculations are explained in OECD Budget Committee document<br />
SCB/88.05 dated 22 February 1988. <strong>The</strong> rule limiting <strong>the</strong> increases year on<br />
year to 0.75 per cent in absolute terms was added in 1987 [C(87)63(Final)]<br />
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and it represents <strong>the</strong> only change made in <strong>the</strong> OECD principles and rules on<br />
this subject since <strong>the</strong> founding <strong>of</strong> <strong>the</strong> Agency in <strong>1974</strong>. By agreement in <strong>the</strong><br />
Council, that change was included in <strong>the</strong> principles and rules, which were<br />
applicable to <strong>the</strong> <strong>IEA</strong>. No action by <strong>the</strong> Governing Board was taken.<br />
Although Article 64.1 <strong>of</strong> <strong>the</strong> I.E.P. Agreement, quoted above, refers to a<br />
review by <strong>the</strong> Governing Board <strong>of</strong> <strong>the</strong> scale <strong>of</strong> contributions after <strong>the</strong> first<br />
year <strong>of</strong> application <strong>of</strong> <strong>the</strong> Agreement, <strong>the</strong>re has been no request for a review<br />
by <strong>the</strong> Board and none has taken place.<br />
<strong>The</strong> <strong>IEA</strong> scale <strong>of</strong> contributions for 1993 was as follows:<br />
Country<br />
Scale <strong>of</strong> Contributions<br />
Australia 1.89<br />
Austria 1.00<br />
Belgium 1.27<br />
Canada 3.75<br />
Denmark 0.78<br />
Finland 0.84<br />
France 7.59<br />
Germany 10.80<br />
Greece 0.41<br />
Ireland 0.24<br />
Italy 7.32<br />
Japan 22.49<br />
Luxembourg 0.10<br />
<strong>The</strong> Ne<strong>the</strong>rlands 1.89<br />
New Zealand 0.26<br />
Norway 0.68<br />
Portugal 0.35<br />
Spain 3.26<br />
Sweden 1.46<br />
Switzerland 1.59<br />
Turkey 0.78<br />
United Kingdom 6.25<br />
United States 25.00<br />
Total 100.00<br />
<strong>The</strong> scales produced in application <strong>of</strong> this system resemble those<br />
applicable to o<strong>the</strong>r OECD Budgets, although in <strong>the</strong> early period <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
299
<strong>the</strong> percentages for it were larger for all Members except <strong>the</strong> U.S., which<br />
alone qualified under <strong>the</strong> 25 per cent maximum rule. As <strong>IEA</strong> membership<br />
grew over <strong>the</strong> years, <strong>the</strong> scales became progressively closer to <strong>the</strong> OECD<br />
Part I scales. After Finland and France joined <strong>the</strong> Agency in 1992, <strong>the</strong>re<br />
was very little difference (<strong>the</strong> small remaining difference was due to <strong>the</strong> fact<br />
that Iceland was <strong>the</strong> only OECD Country which had not joined <strong>the</strong> Agency).<br />
<strong>The</strong> minimum 0.10 per cent rule has been applied only to Luxembourg.<br />
<strong>The</strong> United States has continued regularly at <strong>the</strong> 25 per cent level. In 1991<br />
Japan also reached that level but it receded from it on <strong>the</strong> 1992 scale and it<br />
receded still more on <strong>the</strong> 1993 scale with <strong>the</strong> membership changes that<br />
occurred in 1992. Adjustments in <strong>the</strong> scales became necessary as a<br />
consequence <strong>of</strong> a substantial change in <strong>the</strong> extent <strong>of</strong> a Member’s territory, as<br />
in <strong>the</strong> case <strong>of</strong> Germany upon <strong>the</strong> accession <strong>of</strong> <strong>the</strong> eastern Länder to <strong>the</strong><br />
Federal Republic [See OECD arrangements on this question, in documents<br />
C(92)64 and C/M(92)9/PROV and <strong>the</strong> decision in C(92)64/FINAL].<br />
2. Membership Changes<br />
When changes in <strong>IEA</strong> membership occur, it becomes necessary to adjust <strong>the</strong><br />
scale <strong>of</strong> contributions from <strong>the</strong> effective date <strong>of</strong> <strong>the</strong> new membership<br />
(technically <strong>the</strong> date on which <strong>the</strong> I.E.P. Agreement enters into force for <strong>the</strong><br />
new Member). Two different scales <strong>of</strong> contributions can <strong>the</strong>n be applicable<br />
for parts <strong>of</strong> <strong>the</strong> year: (1) <strong>the</strong> scale initially adopted for <strong>the</strong> year before <strong>the</strong><br />
membership change occurs, and (2) a second scale which includes <strong>the</strong> new<br />
Member, for <strong>the</strong> period between <strong>the</strong> effective date <strong>of</strong> <strong>the</strong> new membership<br />
and <strong>the</strong> end <strong>of</strong> that year. This was done on <strong>the</strong> occasion <strong>of</strong> <strong>the</strong> first six <strong>of</strong><br />
<strong>the</strong> eight new Member arrivals in <strong>the</strong> <strong>IEA</strong> up to <strong>the</strong> date <strong>of</strong> this writing. In<br />
<strong>the</strong>se six cases, since <strong>the</strong>re was no decision to increase <strong>the</strong> effective total<br />
resources <strong>of</strong> <strong>the</strong> Agency by <strong>the</strong> amounts <strong>of</strong> <strong>the</strong> new Member’s contribution,<br />
<strong>the</strong> new Member’s contribution served to decrease <strong>the</strong> effective amounts <strong>of</strong><br />
<strong>the</strong> established Members’ contributions for <strong>the</strong> year.<br />
<strong>The</strong> o<strong>the</strong>r two new memberships, those <strong>of</strong> Finland and France in 1992,<br />
did not fit this prior pattern in all respects. For Finland <strong>the</strong> Agreement<br />
entered into force on 1 January 1992, before <strong>the</strong> scale for 1992 had been<br />
adopted, with <strong>the</strong> consequence that Finland did not require a second scale.<br />
For France, which entered <strong>the</strong> Agency in mid-year, <strong>the</strong> pre-existing situation<br />
was unusual in that a definitive scale for 1992 had (exceptionally) not been<br />
adopted beforehand. Because <strong>of</strong> increasing <strong>IEA</strong> activities, for 1992 <strong>the</strong> Board<br />
decided to increase <strong>the</strong> Agency’s resources by <strong>the</strong> amounts to be contributed<br />
300
y <strong>the</strong> new Members, ra<strong>the</strong>r than to maintain <strong>the</strong> resource levels constant and<br />
to spread <strong>the</strong> assessments over <strong>the</strong> enlarged membership. Moreover, in 1992<br />
<strong>the</strong> pattern <strong>of</strong> establishing <strong>the</strong> scale early in <strong>the</strong> year (usually in <strong>the</strong><br />
springtime) was replaced by <strong>the</strong> decision to fix initially not <strong>the</strong> actual scale <strong>of</strong><br />
contributions but <strong>the</strong> percentages <strong>of</strong> “Advance Payments <strong>of</strong> Participating<br />
Countries” [<strong>IEA</strong>/GB(92)25, Item 11, 11 May 1992] without France, pending<br />
<strong>the</strong> later decision on <strong>the</strong> actual scale when <strong>the</strong> timing <strong>of</strong> French membership<br />
would be known. In order to avoid <strong>the</strong> risk <strong>of</strong> inadvertent over-spending in<br />
<strong>the</strong>se circumstances, <strong>the</strong> Executive Director was committed to adjusting <strong>the</strong><br />
spending <strong>of</strong> Budget appropriations accordingly and to delaying <strong>the</strong><br />
implementation <strong>of</strong> certain items [statement <strong>of</strong> Mrs. Steeg to <strong>the</strong> Governing<br />
Board on 9 December 1991; copy on file in OLC records].<br />
If France had not completed membership proceedings in <strong>the</strong> course <strong>of</strong><br />
<strong>the</strong> year, <strong>the</strong> Advance Payment scale would have been transformed into <strong>the</strong><br />
definitive assessment scale for 1992, and Members’ assessed contributions<br />
would have corresponded to <strong>the</strong> amounts <strong>of</strong> Advance Payments. In that<br />
event <strong>the</strong> actual spending for <strong>the</strong> year would have had to be adjusted<br />
downward by <strong>the</strong> amount <strong>of</strong> <strong>the</strong> expected but unavailable French<br />
contribution, with <strong>the</strong> practical effect that <strong>the</strong> resources available to <strong>the</strong><br />
Agency would have been reduced accordingly. <strong>The</strong> same problem would<br />
arise if French membership were effected after <strong>the</strong> beginning <strong>of</strong> <strong>the</strong> next<br />
financial year (for <strong>the</strong> new Member would be assessed only for <strong>the</strong><br />
corresponding proportion <strong>of</strong> a normal full year’s contribution), unless <strong>the</strong><br />
arrangements could be made to cover <strong>the</strong> potential shortfall by voluntary<br />
contribution or by o<strong>the</strong>r means.<br />
It later developed that French membership became effective on<br />
7 August 1992 and that all <strong>of</strong> <strong>the</strong> anticipated additional resources would be<br />
available to <strong>the</strong> Agency. Hence <strong>the</strong> Governing Board on 22 October 1992<br />
adopted <strong>the</strong> scale <strong>of</strong> contributions as such for 1992 for all <strong>IEA</strong> Members<br />
including France, and noted that <strong>the</strong> percentage amounts were <strong>the</strong> same as<br />
those fixed in <strong>the</strong> Advanced Payments decision previously adopted by <strong>the</strong><br />
Board [<strong>IEA</strong>/GB(92)45, Item 7(a)(ii) and (iii)]. <strong>The</strong> Board also decided in<br />
sub-paragraph (iv) <strong>of</strong> Item 7 “. . . that <strong>the</strong> portion <strong>of</strong> <strong>the</strong> assessment <strong>of</strong><br />
France for <strong>the</strong> Financial Year 1992 that corresponds to <strong>the</strong> period preceding<br />
<strong>the</strong> entry into force for France <strong>of</strong> <strong>the</strong> Agreement on an International Energy<br />
Program will be financed by a voluntary contribution for general use under<br />
Part II, Section 1 (International Energy Agency) <strong>of</strong> <strong>the</strong> Budget <strong>of</strong> <strong>the</strong><br />
Organisation for Financial Year 1992” [Background on <strong>the</strong> 1992 scale <strong>of</strong><br />
contributions is contained in <strong>IEA</strong>/GB(92)34]. In <strong>the</strong> face <strong>of</strong> a number <strong>of</strong><br />
uncertainties, <strong>the</strong> Agency was thus able to absorb <strong>the</strong> new Members’<br />
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contributions smoothly into its total resources, which were accordingly<br />
enlarged by <strong>the</strong> amount <strong>of</strong> <strong>the</strong> new Members’ contributions without<br />
increasing <strong>the</strong> contributions <strong>of</strong> any <strong>of</strong> <strong>the</strong> o<strong>the</strong>r Members.<br />
3. Procedure<br />
<strong>The</strong> scales <strong>of</strong> contributions for <strong>the</strong> Agency have been adopted by <strong>the</strong><br />
Governing Board by <strong>the</strong> application <strong>of</strong> two different procedures, depending<br />
on <strong>the</strong> timing requirements <strong>of</strong> <strong>the</strong> moment. When possible <strong>the</strong> scales have<br />
been adopted in Governing Board meetings (except for <strong>the</strong> first few years<br />
when <strong>the</strong> <strong>IEA</strong> scales were adopted by <strong>the</strong> Council toge<strong>the</strong>r with <strong>the</strong> OECD<br />
scales). At times, however, an <strong>IEA</strong> Governing Board written procedure was<br />
used when <strong>the</strong> decision had to be made in advance <strong>of</strong> <strong>the</strong> next Governing<br />
Board meeting, to accommodate OECD procedures for calling up<br />
contributions. <strong>The</strong> written procedure has been used in <strong>the</strong>se circumstance<br />
in order to enable <strong>the</strong> OECD to call up all <strong>the</strong> contributions toge<strong>the</strong>r, a<br />
convenience to Members as well as to <strong>the</strong> Secretariat [On <strong>the</strong> written<br />
procedure, see generally Chapter V, Section A-15].<br />
<strong>The</strong> scale <strong>of</strong> contributions has always been a non-controversial matter<br />
for which proposals are developed by <strong>the</strong> OECD statistical Staff who<br />
prepare <strong>the</strong> scales for all <strong>of</strong> <strong>the</strong> OECD on <strong>the</strong> basis <strong>of</strong> <strong>the</strong> principles and<br />
rules and statistical data provided by Members; <strong>the</strong> <strong>IEA</strong> Secretariat has not<br />
been substantially involved in this process. When <strong>the</strong> problem <strong>of</strong> timing <strong>the</strong><br />
Board’s decision on <strong>the</strong> scale was foreseen in December 1985, <strong>the</strong> Board<br />
“agreed that <strong>the</strong> Governing Board would fix <strong>the</strong> Scale <strong>of</strong> Contributions to<br />
<strong>the</strong> 1986 Budget <strong>of</strong> <strong>the</strong> Agency by <strong>the</strong> written procedure”, without defining<br />
<strong>the</strong> precise procedure to be applied [<strong>IEA</strong>/GB(85)56, Item 3]. Following<br />
<strong>the</strong> adoption <strong>of</strong> <strong>the</strong> decision by <strong>the</strong> procedure as proposed by <strong>the</strong> Secretariat<br />
(<strong>the</strong> absence by a specified date <strong>of</strong> a Member’s negative response to <strong>the</strong><br />
Executive Director’s circulated proposal), and after <strong>the</strong> contributions had<br />
been called up pursuant to that decision, <strong>the</strong> Board at its next meeting<br />
“recorded its agreement on <strong>the</strong> Scale <strong>of</strong> Contributions to <strong>the</strong> 1986 Budget <strong>of</strong><br />
<strong>the</strong> Agency set forth in <strong>the</strong> Annex to document <strong>IEA</strong>/GB(86)13” [See<br />
<strong>IEA</strong>/GB(86)15, Item 4(d)]. <strong>The</strong>reafter, <strong>the</strong> Secretariat took <strong>the</strong> initiative to<br />
employ <strong>the</strong> written procedure in parallel circumstances, and <strong>the</strong> Board<br />
subsequently recorded <strong>the</strong> outcome for <strong>the</strong> scales applicable in 1987<br />
[<strong>IEA</strong>/GB(87)29, Item 5(c)], in 1988 [<strong>IEA</strong>/GB(88)14, Item 4(b)], in 1989<br />
[<strong>IEA</strong>/GB(89)11, Item 5(c)] and in 1990 [<strong>IEA</strong>/GB(90)10, Item 4(b)], on<br />
each occasion without difficulty or question <strong>of</strong> any kind. In 1991 <strong>the</strong> scales<br />
were adopted in <strong>the</strong> normal way in a meeting <strong>of</strong> <strong>the</strong> Board [<strong>IEA</strong>/GB(91)19,<br />
302
Item 7(b)], as <strong>the</strong>y were also in 1992 [<strong>IEA</strong>/GB(92)45, Item 7(a)] and in<br />
1993 [<strong>IEA</strong>/GB(93)11, Item 7(d)]. This procedure could be simplified if <strong>the</strong><br />
information needed for calculating <strong>the</strong> scales were available soon enough to<br />
enable <strong>the</strong> OECD Staff to make <strong>the</strong> calculations in time for consideration<br />
each year in <strong>the</strong> December Governing Board meeting when <strong>the</strong> Programme<br />
<strong>of</strong> Work and Budget are adopted.<br />
H. <strong>Vol</strong>untary Contributions and Grants<br />
1. Authority<br />
<strong>The</strong> Governing Board’s authority to accept voluntary contributions and grants<br />
on behalf <strong>of</strong> <strong>the</strong> Agency and to appropriate <strong>the</strong> resulting funds is not<br />
specifically mentioned in <strong>the</strong> I.E.P. Agreement, but in accordance with general<br />
international organization practice it is derived from <strong>the</strong> Board’s general<br />
powers to finance <strong>the</strong> Agency’s activities. In <strong>the</strong> case <strong>of</strong> <strong>the</strong> <strong>IEA</strong> those general<br />
powers are contained in Article 64.3 (financial regulations) and 64.4 (all<br />
necessary decisions “regarding <strong>the</strong> financial administration <strong>of</strong> <strong>the</strong> Agency”).<br />
<strong>The</strong> only textual reference to this question in <strong>the</strong> constituent<br />
documents <strong>of</strong> <strong>the</strong> Agency is contained in Article 10(c) <strong>of</strong> <strong>the</strong> Council<br />
Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency which provides this:<br />
Notwithstanding <strong>the</strong> provisions <strong>of</strong> Article 14(b) <strong>of</strong> <strong>the</strong> Financial<br />
Regulations (<strong>of</strong> <strong>the</strong> OECD), <strong>the</strong> Governing Board may accept<br />
voluntary contributions and grants as well as payments for<br />
services rendered by <strong>the</strong> Agency.<br />
OECD Financial Regulation Article 14(b) would not have fit <strong>the</strong> circumstances<br />
<strong>of</strong> <strong>the</strong> Agency. If acceptance <strong>of</strong> an <strong>IEA</strong> voluntary contribution or<br />
grant required a decision by <strong>the</strong> OECD Council or an authorization by <strong>the</strong><br />
Secretary-General, application <strong>of</strong> Article 14(b) could have impaired <strong>IEA</strong><br />
autonomy. Consequently, Article 10(c) was needed to avoid any possibility<br />
that <strong>the</strong> OECD Regulation applied to <strong>the</strong> Agency.<br />
2. Description <strong>of</strong> Contributions<br />
<strong>Vol</strong>untary contributions and grants have been made for a wide spectrum <strong>of</strong><br />
<strong>IEA</strong> activities over <strong>the</strong> years. While <strong>the</strong>re were no voluntary contributions<br />
303
or grants prior to 1980, since <strong>the</strong>n <strong>the</strong>ir scope, number and importance have<br />
grown significantly. <strong>The</strong> kinds <strong>of</strong> energy activities for which <strong>the</strong>y have been<br />
granted include co-operation with European Economies in Transition,<br />
working group activities, data workshop, technology activities, studies,<br />
conferences, and publication <strong>of</strong> conference proceedings. Most <strong>of</strong> <strong>the</strong><br />
contributions or grants so far have been made by governments, although, one<br />
was made by <strong>the</strong> Commission <strong>of</strong> <strong>the</strong> European Communities (European<br />
Commission) and one by <strong>the</strong> Asian Development Bank. In three cases <strong>the</strong>y<br />
were made by non-Members <strong>of</strong> <strong>the</strong> Agency, two in 1991 by France for <strong>the</strong> R<br />
& D sector before France became an <strong>IEA</strong> Member, and most recently (1993)<br />
by Venezuela for support <strong>of</strong> <strong>the</strong> Energy Working Group <strong>of</strong> <strong>the</strong> Co-ordinating<br />
Conference on Assistance to <strong>the</strong> Newly Independent States. In two cases <strong>the</strong><br />
grants (by Japan and <strong>the</strong> United States in 1989) were accepted by <strong>the</strong> Board<br />
in <strong>the</strong> alternative, ei<strong>the</strong>r by <strong>the</strong> amount <strong>of</strong> funds sufficient to cover <strong>the</strong> cost <strong>of</strong><br />
a Staff Member or by <strong>the</strong> secondment <strong>of</strong> <strong>the</strong> individual whose costs would be<br />
borne directly by <strong>the</strong> contributor [See <strong>IEA</strong>/GB(89)54, Item 3(e)].<br />
3. Alternative Financing<br />
<strong>The</strong> possibility <strong>of</strong> <strong>the</strong> <strong>IEA</strong> receiving voluntary contributions and grants <strong>of</strong>fers a<br />
measure <strong>of</strong> flexibility to <strong>the</strong> Agency’s financing system. In 1991 and 1992 <strong>the</strong>re<br />
were devised two alternative approaches to <strong>the</strong> financing <strong>of</strong> <strong>IEA</strong> programme<br />
work on <strong>the</strong> European Economies in Transition (EET), when it appeared that<br />
<strong>the</strong> “zero real growth” policy could o<strong>the</strong>rwise cause a problem for some<br />
Members, because additional funding would become necessary. Some <strong>IEA</strong><br />
countries indicated a preference for making voluntary contributions for that<br />
work, while o<strong>the</strong>rs preferred <strong>the</strong> traditional means <strong>of</strong> assessed contributions.<br />
For OECD Members which had this same problem, that Organisation proposed<br />
to <strong>of</strong>fer <strong>the</strong>m a choice between <strong>the</strong> two procedures, and that was done by <strong>the</strong><br />
<strong>IEA</strong> as well. In <strong>the</strong> Governing Board’s Budget decision for 1991 <strong>the</strong>re was an<br />
appropriation <strong>of</strong> FF 4,725,000 for EET activities [<strong>IEA</strong>/GB(90)46, Item 3(d)],<br />
and <strong>the</strong> financing <strong>of</strong> that appropriation was made as follows:<br />
(ii) with regard to financing this 1991 appropriation, Member<br />
countries should be guided by <strong>the</strong> <strong>IEA</strong> scale <strong>of</strong> contributions,<br />
as well as by <strong>the</strong> decision to be taken by <strong>the</strong> OECD Council<br />
with respect to financing <strong>of</strong> expenditure for co-operation<br />
with European economies in transition, <strong>the</strong> choice <strong>of</strong> <strong>the</strong><br />
modalities <strong>of</strong> <strong>the</strong>ir respective contributions being at <strong>the</strong><br />
decision <strong>of</strong> <strong>the</strong> Member countries.<br />
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<strong>The</strong> same question was presented <strong>the</strong> following year when <strong>the</strong> Board<br />
adopted <strong>the</strong> 1992 Budget containing <strong>the</strong> following statement, under <strong>the</strong><br />
rubric “Total proposed financing under Part II” [<strong>IEA</strong>/GB(91)68,<br />
Attachment B, p. 14]:<br />
<strong>of</strong> which FF 5,275,000 shall be financed by member countries’<br />
contributions, voluntary contributions or o<strong>the</strong>r contributions for<br />
Relations with European Economies in Transition (item <strong>20</strong>.<strong>20</strong><br />
<strong>of</strong> <strong>the</strong> Budget).<br />
In this fashion, alternative financing made it possible for Members to choose<br />
between <strong>the</strong> two different modalities in consequence <strong>of</strong> <strong>the</strong>ir respective<br />
internal requirements, and for <strong>the</strong> EET activities to go forward on a sound<br />
and workable financial basis during those two years. After <strong>the</strong> successful<br />
application <strong>of</strong> alternative financing in 1991 and 1992, additional resources<br />
became available through <strong>the</strong> memberships <strong>of</strong> Finland and France which<br />
enabled <strong>the</strong> Agency to provide for EET funding by assessed contributions.<br />
Thus EET activities were financed in 1993 and in <strong>1994</strong> in <strong>the</strong> normal way<br />
by assessed contributions and without <strong>the</strong> need for alternative financing.<br />
4. Procedures<br />
<strong>The</strong> procedure initially foreseen for <strong>the</strong> acceptance <strong>of</strong> voluntary contributions and<br />
grants was for <strong>the</strong> Board to act on each proposal in a meeting. That procedure<br />
was soon enlarged to a two-fold arrangement, with <strong>the</strong> added possibility <strong>of</strong> <strong>the</strong><br />
Board’s acting by a written procedure as well. From <strong>the</strong> time <strong>of</strong> <strong>the</strong> first<br />
voluntary contribution in 1980 ($30,000 from <strong>the</strong> United States for a Refinery<br />
Flexibility Study), <strong>the</strong> need for a simple and adaptable procedure was apparent.<br />
In accepting that first contribution <strong>the</strong> Board [<strong>IEA</strong>/GB(80)69, Item 9(b) and (c)]<br />
noted <strong>the</strong> statements made by Delegations with regard to a<br />
more flexible procedure for accepting grants, as proposed in<br />
document <strong>IEA</strong>/GB(80)60;<br />
requested <strong>the</strong> Secretariat to submit to <strong>the</strong> next Meeting <strong>of</strong> <strong>the</strong><br />
Governing Board a new proposal revised in <strong>the</strong> light <strong>of</strong> <strong>the</strong>se<br />
statements.<br />
In acting on Secretariat proposals for a written procedure [<strong>IEA</strong>/GB(80)86,<br />
Item 5], on 21 November 1980 <strong>the</strong> Board:<br />
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decided to proceed as follows as regards any voluntary contribution or<br />
grant for <strong>the</strong> conduct <strong>of</strong> activities included in <strong>the</strong> Agency’s<br />
Programme <strong>of</strong> Work and up to an amount not exceeding FF 250,000<br />
[Note: <strong>the</strong> amount was later raised to FF 500,000; see below]:<br />
(a) <strong>the</strong> Executive Director shall circulate to all Participating<br />
Countries information on <strong>the</strong> source, destination and<br />
amount <strong>of</strong> any <strong>of</strong>fer <strong>of</strong> a voluntary contribution or grant<br />
toge<strong>the</strong>r with his proposal to accept or refuse such <strong>of</strong>fer;<br />
(b) <strong>the</strong> proposal made by <strong>the</strong> Executive Director shall be regarded<br />
as accepted by <strong>the</strong> Governing Board, and such acceptance<br />
shall be recorded in <strong>the</strong> Conclusions <strong>of</strong> a subsequent Meeting<br />
<strong>of</strong> <strong>the</strong> Board, unless a Participating Country expresses<br />
reservations about <strong>the</strong> proposal to <strong>the</strong> Executive Director<br />
within 21 days following circulation <strong>of</strong> <strong>the</strong> proposal.<br />
By 1991 <strong>the</strong> limitation <strong>of</strong> <strong>the</strong> written procedure to amounts <strong>of</strong> FF 250,000<br />
needed up-dating, and <strong>the</strong> Board accordingly increased <strong>the</strong> limit to<br />
FF 500,000, taking into account inflation between 1980 and 1990<br />
[<strong>IEA</strong>/GB(91)25, Item 4(b)].<br />
During <strong>the</strong> period between 1980 - December 1993, a total <strong>of</strong><br />
36 voluntary contributions or grants were made to <strong>the</strong> Agency. Of those,<br />
<strong>20</strong> were approved by <strong>the</strong> written procedure, and <strong>the</strong> balance, in meetings <strong>of</strong><br />
<strong>the</strong> Board. Usually <strong>the</strong> written procedure was utilized in cases <strong>of</strong> urgency,<br />
when a decision needed to be made before <strong>the</strong> next Board meeting. In<br />
December 1993 <strong>the</strong> Governing Board decided to proceed by <strong>the</strong> written<br />
procedure as regards voluntary contributions for <strong>the</strong> conduct <strong>of</strong> a joint<br />
<strong>IEA</strong>/OECD study on energy and <strong>the</strong> environment, for <strong>the</strong> first time<br />
adopting that procedure without limitation as to <strong>the</strong> amounts <strong>of</strong> <strong>the</strong><br />
contributions [<strong>IEA</strong>/GB(93)65, Item 6(a)]. In <strong>the</strong> absence <strong>of</strong> special<br />
circumstances <strong>of</strong> timing or convenience, <strong>the</strong> general practice has been for<br />
<strong>the</strong> Governing Board to act on <strong>the</strong> proposal at a Board meeting.<br />
I. Financial Regulations<br />
<strong>The</strong> I.E.P. Agreement expressly contemplates <strong>the</strong> adoption <strong>of</strong> financial<br />
regulations by <strong>the</strong> Governing Board [Article 64.3], but <strong>the</strong> Board has not<br />
found it necessary to adopt systematic financial regulations in <strong>the</strong><br />
306
traditional form [Cf. <strong>the</strong> Financial Regulations <strong>of</strong> <strong>the</strong> OECD]. In practice<br />
<strong>the</strong> Board has sought to avoid such systematic administrative legislation not<br />
only for financial questions, but also for personnel and o<strong>the</strong>r sectors where<br />
systematic legislation has not proven necessary to <strong>the</strong> administration <strong>of</strong> <strong>the</strong><br />
Agency’s operations. <strong>The</strong> financial provisions <strong>of</strong> <strong>the</strong> Agreement itself, <strong>the</strong><br />
individual Governing Board decisions on such matters from time to time<br />
and <strong>the</strong> backdrop <strong>of</strong> <strong>the</strong> OECD Financial Regulations and Rules for most<br />
routine questions have obviated <strong>the</strong> need for <strong>the</strong> Board itself to embark on<br />
<strong>the</strong> preparation <strong>of</strong> systematic financial regulations.<br />
<strong>The</strong> essential “Financial Arrangements” are provided in Article 64 <strong>of</strong><br />
<strong>the</strong> I.E.P. Agreement, summarized as follows:<br />
■ Scales <strong>of</strong> contributions are to follow OECD principles and rules, and<br />
appropriate changes in <strong>the</strong> scale are to be made by <strong>the</strong> Governing<br />
Board [paragraph 1].<br />
■ Special expenses, those incurred in connection with special activities,<br />
are to be shared as agreed unanimously among <strong>the</strong> participants in<br />
those activities [paragraph 2].<br />
■ Financial regulations are to be adopted by <strong>the</strong> Governing Board<br />
[paragraph 3].<br />
■ <strong>The</strong> Executive Director is required to submit <strong>the</strong> draft Budget,<br />
including personnel requirements, not later than 1 October <strong>of</strong> each<br />
year [paragraph 3].<br />
■ <strong>The</strong> Governing Board adopts <strong>the</strong> Budget by majority [paragraph 3].<br />
■ All o<strong>the</strong>r necessary decisions on financial administration are to be<br />
taken by <strong>the</strong> Board, acting by majority [paragraph 4].<br />
■ <strong>The</strong> <strong>IEA</strong> financial year is from 1 January to 31 December [paragraph 5].<br />
■ At <strong>the</strong> end <strong>of</strong> each financial year <strong>the</strong>re is to be an audit <strong>of</strong> revenues<br />
and expenditures [paragraph 5].<br />
Financial matters are also treated in Article 10 <strong>of</strong> <strong>the</strong> OECD Council<br />
Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency :<br />
■<br />
■<br />
■<br />
■<br />
<strong>The</strong> Agency Budget is part <strong>of</strong> <strong>the</strong> OECD Budget, Part II [paragraph (a)].<br />
Members’ financing is to be fixed by Governing Board decision<br />
[paragraph (a)].<br />
Special expenses are arranged as in <strong>the</strong> second item in <strong>the</strong> above<br />
paragraph on elements drawn from Article 64 <strong>of</strong> <strong>the</strong> I.E.P. Agreement<br />
[paragraph (a)].<br />
<strong>The</strong> Board is to designate a budget advisory organ [paragraph (a)].<br />
307
■<br />
■<br />
■<br />
<strong>IEA</strong> Budget proposals are to be adopted by <strong>the</strong> OECD Council by<br />
agreement <strong>of</strong> <strong>the</strong> same <strong>IEA</strong> Members which voted favorably in <strong>the</strong><br />
Governing Board [paragraph (b)].<br />
<strong>The</strong> Board is to accept voluntary contributions, grants and payments<br />
for Agency services [paragraph (c)].<br />
<strong>The</strong>re is an automatic carry forward <strong>of</strong> certain appropriations for<br />
special activities [paragraph (d)].<br />
In addition to <strong>the</strong>se financial administration rules, <strong>the</strong> Agency has<br />
developed, by means <strong>of</strong> a number <strong>of</strong> Board decisions a body <strong>of</strong> more or less<br />
permanent procedures and guidance. Most <strong>of</strong> <strong>the</strong>se decisions are described<br />
elsewhere in this Chapter and need only brief mention here. Many <strong>of</strong> <strong>the</strong>m<br />
constitute rules related to or contained in <strong>the</strong> annual budget decisions <strong>of</strong> <strong>the</strong><br />
Governing Board, for which a pattern was established as early as 1975 and<br />
1976. After <strong>the</strong> draft Programme <strong>of</strong> Work and Budget document is<br />
prepared and circulated each year, a first review takes place in an autumn<br />
meeting <strong>of</strong> <strong>the</strong> Governing Board, where <strong>the</strong> draft Programme is fully<br />
discussed, and <strong>the</strong> draft Budget is noted. <strong>The</strong> practice is <strong>the</strong>n for <strong>the</strong> Board<br />
to “approve <strong>the</strong> directions <strong>of</strong> work” and to refer <strong>the</strong> draft Programme <strong>of</strong><br />
Work with <strong>the</strong> draft Budget to <strong>the</strong> Budget Committee “for its consideration<br />
<strong>of</strong> <strong>the</strong> resources required” for that year’s Budget to fulfill <strong>the</strong> Programme <strong>of</strong><br />
Work, taking into account <strong>the</strong> Board’s discussion <strong>of</strong> <strong>the</strong> Programme, and to<br />
carry out <strong>the</strong> work <strong>of</strong> <strong>the</strong> OECD in <strong>the</strong> energy field. <strong>The</strong> Committee is <strong>the</strong>n<br />
requested to convene “at its earliest convenience” and to submit its<br />
recommendations to <strong>the</strong> Board at its December meeting. In December <strong>the</strong><br />
Board receives <strong>the</strong> Committee’s report, adopts both <strong>the</strong> Programme <strong>of</strong> Work<br />
and <strong>the</strong> Budget, acts on any additional financial or related question<br />
submitted to it and transmits <strong>the</strong> Budget to <strong>the</strong> Council for adoption in<br />
accordance with <strong>the</strong> Article 10(b) <strong>of</strong> <strong>the</strong> Council Decision cited above [For<br />
an example <strong>of</strong> <strong>the</strong> textual rendering <strong>of</strong> <strong>the</strong>se actions for <strong>1994</strong>, see<br />
<strong>IEA</strong>/GB(93)57, Item 3 and <strong>IEA</strong>/GB(93)65, Item 2]. This pattern is<br />
followed quite rigorously each year and has provided an efficient and<br />
effective means for adopting <strong>the</strong> Budget and for treating related questions.<br />
It has not proven necessary to codify any <strong>of</strong> this practice which thus<br />
remains adaptable when that might best serve <strong>the</strong> Agency’s purposes.<br />
This pattern <strong>of</strong> decisions also contains particular elements which are<br />
so regularly adopted without discussion in identical or essentially similar<br />
terms that <strong>the</strong>y might be considered tantamount to financial regulations<br />
developed by a consistent line <strong>of</strong> precedents. Until <strong>1994</strong> for example, in<br />
each year’s Budget decision <strong>the</strong> Board applied a “single Budget” rule which<br />
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provided a safeguard required by <strong>the</strong> mix <strong>of</strong> OECD Budget Part I and Part<br />
II elements <strong>of</strong> <strong>IEA</strong> funding. Any shortfall under <strong>the</strong> OECD contribution<br />
would be funded under <strong>the</strong> <strong>IEA</strong> Part II Budget, and <strong>the</strong> Agency would<br />
receive <strong>the</strong> full funding necessary to carry out <strong>the</strong> Programme <strong>of</strong> Work for<br />
<strong>the</strong> year [See <strong>IEA</strong>/GB(92)53, Item 6(q)]. This was an important “fail-safe”<br />
element which ensured <strong>the</strong> continuity <strong>of</strong> <strong>IEA</strong> funding in case <strong>the</strong> non-<br />
Member elements from OECD should not be forthcoming; but in <strong>1994</strong> with<br />
<strong>the</strong> inclusion <strong>of</strong> all <strong>IEA</strong> funding in <strong>the</strong> Agency’s Budget this type <strong>of</strong><br />
safeguard protection was no longer necessary.<br />
Ano<strong>the</strong>r example <strong>of</strong> precedent may be seen in <strong>the</strong> Board’s action each<br />
year when it notes “that <strong>the</strong> appropriations are included in a one-Chapter<br />
Budget and that transfers <strong>of</strong> appropriations are subject to normal<br />
procedures” which provides flexibility for <strong>the</strong> Executive Director to make<br />
<strong>the</strong> transfers and to report <strong>the</strong>m to <strong>the</strong> <strong>IEA</strong> Budget Committee under<br />
<strong>the</strong> normal procedures [See <strong>the</strong> example contained in <strong>IEA</strong>/GB(93)65,<br />
Item 2(f)(xiv)]. In still ano<strong>the</strong>r case each year <strong>the</strong> Board establishes <strong>the</strong><br />
“Organisation” <strong>of</strong> <strong>the</strong> <strong>IEA</strong> [See, e.g. <strong>the</strong> chart and descriptions contained in<br />
<strong>IEA</strong>/GB(93)63, Attachment C, p. 33; <strong>the</strong> chart is reproduced in Appendix V<br />
below] as set forth in <strong>the</strong> Secretariat’s submissions, but invites “<strong>the</strong><br />
Executive Director to modify it as required within <strong>the</strong> number and level <strong>of</strong><br />
permanent posts provided, to meet changing priorities and needs” [See<br />
<strong>IEA</strong>/GB(93)65, Item 2(f)(vii)].<br />
<strong>The</strong> annual Budget decisions contain a number <strong>of</strong> routine actions<br />
taken without discussion and essentially in <strong>the</strong> same terms each year,<br />
providing o<strong>the</strong>r rule-like practices. Thus <strong>the</strong> Board:<br />
■<br />
■<br />
carried forward its previous authorizations to <strong>the</strong> Executive Director,<br />
until such time as <strong>the</strong> Board shall reach a different decision,<br />
regarding recruitment <strong>of</strong> project staff [See <strong>IEA</strong>/GB(93)65, Item 2(f)(xi)].<br />
carried forward its authorization given to <strong>the</strong> Executive Director in<br />
1979 [<strong>IEA</strong>/GB(80)3, Item 2(j)(i),(ii)]:<br />
A. to commit funds up to FF 5,4<strong>20</strong>,000 (in <strong>1994</strong> prices) in case <strong>of</strong><br />
activation <strong>of</strong> <strong>the</strong> Emergency Sharing System;<br />
B. when <strong>the</strong> Board determines that <strong>the</strong> need has arisen, to request<br />
<strong>the</strong> Secretary-General, in application <strong>of</strong> Financial Regulation<br />
13(b), to call on Participating Countries to make additional<br />
payments to cover such expenditure until such time as a<br />
supplementary Budget has been prepared and approved<br />
[<strong>IEA</strong>/GB(93)65, Item 2(f)(x)].<br />
309
■<br />
■<br />
endorsed <strong>the</strong> Executive Director’s efforts to continue to keep Delegations<br />
informed as to pr<strong>of</strong>essional staff recruitment [<strong>IEA</strong>/GB(93)65,<br />
Item 2(f)(viii)].<br />
invited <strong>the</strong> “Executive Director to keep Delegations and relevant<br />
bodies informed <strong>of</strong> consultancy projects and costs related <strong>the</strong>reto<br />
[<strong>IEA</strong>/GB(93)65, Item 2(f)(ix)].<br />
<strong>The</strong> Agency also applies <strong>the</strong> Financial Regulations <strong>of</strong> <strong>the</strong> OECD as<br />
necessary and as a back-up body <strong>of</strong> rules applicable when <strong>the</strong> Governing<br />
Board has not acted in <strong>the</strong> relevant fields. <strong>The</strong>se cover routine matters,<br />
which do not have direct implications for <strong>the</strong> energy policy work <strong>of</strong> <strong>the</strong><br />
Agency, including <strong>the</strong> following: receiving Members’ contributions and o<strong>the</strong>r<br />
revenue, making disbursements, cash management (<strong>the</strong> <strong>IEA</strong> does not<br />
handle funds directly, o<strong>the</strong>r than to pass on any receipts to <strong>the</strong> authorized<br />
OECD <strong>of</strong>ficers), most routine purchase contracts, <strong>the</strong> maintenance <strong>of</strong><br />
accounts, internal financial control, <strong>the</strong> audit <strong>of</strong> accounts, <strong>the</strong> inventory,<br />
and <strong>the</strong> disposition <strong>of</strong> property (for which <strong>the</strong> OECD Secretariat also<br />
provides <strong>the</strong> corresponding operational services). <strong>The</strong> OECD thus provides<br />
to <strong>the</strong> Agency valuable regulatory and operational services, while <strong>the</strong><br />
Agency has been able to maintain <strong>the</strong> regulatory autonomy in <strong>the</strong> financial<br />
sector necessary to carry out its operations efficiently and effectively.<br />
J. Expenditure for Special Activities<br />
Although authority for creating tailor-made financing arrangements for<br />
special activities is specifically foreseen in <strong>the</strong> Agency’s constituent<br />
documents, and despite early expectations that this would provide Agency<br />
countries with an important financial tool, in fact this authority has yet to<br />
be employed in <strong>IEA</strong> Budget practice. <strong>The</strong> operational mechanism foreseen<br />
is found in Article 65 <strong>of</strong> <strong>the</strong> I.E.P. Agreement, which provides that any two<br />
or more Members may decide to carry out “special activities” (i.e. activities<br />
<strong>of</strong> interest to less than all Members) within <strong>the</strong> scope <strong>of</strong> <strong>the</strong> Agreement<br />
(o<strong>the</strong>r than those required <strong>of</strong> all Members under <strong>the</strong> emergency Chapters).<br />
Members not participating in <strong>the</strong> special activity are to abstain from voting,<br />
and <strong>the</strong> participants in <strong>the</strong> activity are to keep <strong>the</strong> Board informed [See<br />
Chapter V, Section A-18].<br />
<strong>The</strong> underlying intention <strong>of</strong> Article 65 was to permit groups <strong>of</strong><br />
Members to engage in specialized energy projects which might not attract<br />
310
<strong>the</strong> participation <strong>of</strong> <strong>the</strong> group as a whole or which might require innovative<br />
or o<strong>the</strong>r financing arrangements falling outside <strong>of</strong> <strong>the</strong> normal <strong>IEA</strong> financing<br />
pattern. <strong>The</strong> projects would never<strong>the</strong>less be developed under <strong>the</strong> auspices <strong>of</strong><br />
<strong>the</strong> Agency. For example, those <strong>IEA</strong> Members which were major producers<br />
<strong>of</strong> coal might wish to join toge<strong>the</strong>r to finance a co-operative project on coal<br />
information or research. <strong>The</strong>y might wish to fund that among <strong>the</strong>mselves<br />
on <strong>the</strong> basis <strong>of</strong> a formula which reflected <strong>the</strong>ir respective proportions <strong>of</strong> <strong>the</strong><br />
group’s coal production, trade or consumption, or on <strong>the</strong> basis <strong>of</strong> some o<strong>the</strong>r<br />
formula which varied from <strong>the</strong> OECD principles and rules for fixing all<br />
Member contributions to <strong>the</strong> <strong>IEA</strong> Budgets under Article 64.1 <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement. <strong>The</strong> key concepts under consideration were flexibility <strong>of</strong><br />
participation and financing arrangements.<br />
<strong>The</strong> financing flexibility was specifically provided in <strong>the</strong> I.E.P.<br />
Agreement, Article 64.2, as follows:<br />
Special expenses incurred in connection with special activities<br />
carried out pursuant to Article 65 shall be shared by <strong>the</strong><br />
Participating Countries taking part in such special activities in<br />
such proportions as shall be determined by unanimous<br />
agreement between <strong>the</strong>m.<br />
This provision, which has its counterpart in Article 10(a) <strong>of</strong> <strong>the</strong> Council<br />
Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency, would enable <strong>the</strong> special<br />
activities to be carried out within <strong>the</strong> Agency under decisions <strong>of</strong> <strong>the</strong><br />
participants and to be financed and operated under special <strong>IEA</strong> Budgets<br />
adopted by <strong>the</strong> participants in <strong>the</strong> activities, with <strong>the</strong> o<strong>the</strong>r <strong>IEA</strong> Members<br />
abstaining from taking part in <strong>the</strong> decisions and not being bound by <strong>the</strong>m.<br />
<strong>The</strong> overall purpose <strong>of</strong> Articles 64.2 and 65 was to establish a project<br />
system which would be operated within <strong>the</strong> <strong>IEA</strong> much in <strong>the</strong> same fashion<br />
as Part II Budgets are operated in <strong>the</strong> OECD (including <strong>the</strong> <strong>IEA</strong> Part II<br />
Budget), with <strong>the</strong> advantages <strong>of</strong> flexibility outlined above. <strong>The</strong> technical<br />
distinctions between <strong>the</strong> two OECD systems and <strong>the</strong> current practices are<br />
set forth in <strong>the</strong> OECD document “Structure <strong>of</strong> Parts I and II <strong>of</strong> <strong>the</strong> Budget<br />
and Financing Arrangements [CES(92)28, <strong>of</strong> 22 April 1992].<br />
Article 65 authority has been employed many times for <strong>the</strong> establishment<br />
<strong>of</strong> co-operative programmes and projects in <strong>the</strong> R & D sector. Over <strong>the</strong><br />
first twenty years <strong>of</strong> <strong>the</strong> Agency <strong>the</strong>re have been some sixty <strong>of</strong> those<br />
Agreements, with about forty-five active at <strong>the</strong> end <strong>of</strong> 1993, and more are<br />
contemplated. Each <strong>of</strong> <strong>the</strong>se Agreements has been brought under <strong>the</strong><br />
auspices <strong>of</strong> <strong>the</strong> <strong>IEA</strong> by a Governing Board decision made pursuant to Article 65.<br />
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Many <strong>of</strong> those Agreements contain innovative and unusual financing<br />
provisions <strong>of</strong> <strong>the</strong> type foreseeable under Article 64.2 quoted above, but none<br />
<strong>of</strong> <strong>the</strong>m has been financed under that provision as such. Financial<br />
contributions under those Agreements have been arranged separately from<br />
<strong>the</strong> <strong>IEA</strong>. Typically <strong>the</strong> financing formula has been set forth specifically in<br />
<strong>the</strong> Agreement, or <strong>the</strong> project Executive Committee was itself empowered to<br />
fix <strong>the</strong> formula, and <strong>the</strong> financial contributions were made to <strong>the</strong> project<br />
Operating Agent and managed by it without use <strong>of</strong> <strong>IEA</strong> or OECD financing<br />
mechanisms or administration. This practice may be explained by a<br />
number <strong>of</strong> factors. <strong>The</strong> participants have preferred to operate directly<br />
under <strong>the</strong> system <strong>the</strong>y adopted in <strong>the</strong> Agreements. In some cases <strong>the</strong><br />
financial administration might best be handled by <strong>the</strong> authorities<br />
responsible for operating <strong>the</strong> project. In most cases <strong>the</strong> projects have been<br />
open from <strong>the</strong> beginning not only to <strong>IEA</strong> governments, but also to national<br />
agencies, public organizations, private corporations, companies and o<strong>the</strong>r<br />
entities designated by an <strong>IEA</strong> Member as well as by <strong>the</strong> European<br />
Communities (European Union). Non-Member countries <strong>of</strong> <strong>the</strong> <strong>IEA</strong> also<br />
have participated in some cases, a practice that in <strong>the</strong> early 1990s appeared<br />
to become increasingly important [See Chapter V, Section 15 which<br />
describes <strong>the</strong> written procedure employed for “Associate” participation in<br />
<strong>the</strong> Implementing Agreements]. Nei<strong>the</strong>r <strong>the</strong> designated parties nor <strong>the</strong> non-<br />
Member country parties were clearly covered by <strong>the</strong> special activities<br />
formulation in <strong>the</strong> I.E.P. Agreement.<br />
While arrangements could <strong>the</strong>oretically have been made to accommodate<br />
those disparate elements under <strong>the</strong> Article 64.2 concepts, this would<br />
have required <strong>the</strong> adoption <strong>of</strong> complex mechanisms. So far as can be<br />
determined from <strong>the</strong> record, <strong>the</strong>re have been no serious proposals tending in<br />
that direction, doubtless because <strong>of</strong> <strong>the</strong> relative ease, simplicity and<br />
availability <strong>of</strong> <strong>the</strong> more decentralized arrangements adopted within each<br />
project up to <strong>the</strong> date <strong>of</strong> this writing.<br />
K. Audits<br />
Regular audits <strong>of</strong> <strong>the</strong> Agency’s financial accounts (revenues and<br />
expenditure) would <strong>of</strong> course be expected as part <strong>of</strong> a sound financial<br />
practice, and provision to that effect was made in Article 64.5 <strong>of</strong> <strong>the</strong> I.E.P.<br />
Agreement as follows:<br />
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At <strong>the</strong> end <strong>of</strong> each financial year, revenues and expenditures<br />
shall be submitted to audit.<br />
Those audits have taken place each year since <strong>the</strong> foundation <strong>of</strong> <strong>the</strong> Agency.<br />
<strong>The</strong>y are carried out by OECD Auditors pursuant to <strong>the</strong> OECD Financial<br />
Regulations and as part <strong>of</strong> <strong>the</strong> routine audit <strong>of</strong> OECD financial accounts,<br />
since <strong>the</strong> OECD handles all funds which are received or expended on behalf<br />
<strong>of</strong> <strong>the</strong> Agency. That system has always proceeded smoothly and has<br />
ensured <strong>the</strong> <strong>IEA</strong> that <strong>the</strong> objectives <strong>of</strong> such financial account audits would<br />
be realized.<br />
Until 1986 <strong>the</strong> OECD audits <strong>of</strong> <strong>the</strong> <strong>IEA</strong> were limited to <strong>the</strong> routine<br />
financial examinations described above. For <strong>the</strong> 1986 Budget, however, <strong>the</strong><br />
OECD auditors sought to broaden <strong>the</strong>ir <strong>IEA</strong> examinations to include<br />
operational efficiency and economy, a practice begun two years earlier in<br />
selected parts <strong>of</strong> <strong>the</strong> OECD. Operational audits <strong>of</strong> that kind could extend<br />
beyond financial accounts to include such matters as <strong>the</strong> use <strong>of</strong> conferences<br />
and missions, <strong>the</strong> disposition <strong>of</strong> personnel, <strong>the</strong> use <strong>of</strong> consultants and<br />
auxiliaries, staff overtime, purchase strategies and procedures for material<br />
acquisitions, contract payments policies, <strong>the</strong> implementation <strong>of</strong> security and<br />
o<strong>the</strong>r internal rules, <strong>the</strong> use made <strong>of</strong> personnel and materials, and o<strong>the</strong>r<br />
questions <strong>of</strong> management and operational efficiency. While <strong>the</strong> Executive<br />
Director welcomed that kind <strong>of</strong> support, <strong>the</strong> use <strong>of</strong> OECD auditors<br />
presented a number <strong>of</strong> problems for <strong>IEA</strong> autonomy and operational<br />
independence.<br />
Upon receiving word <strong>of</strong> <strong>the</strong> OECD Auditors’ wish to conduct an <strong>IEA</strong><br />
operational audit for <strong>the</strong> first time, <strong>the</strong> Executive Director undertook a<br />
series <strong>of</strong> consultations culminating in presentations on <strong>the</strong>se issues to <strong>the</strong><br />
<strong>IEA</strong> Budget Committee and <strong>the</strong> Governing Board in 1986 and 1987.<br />
Whe<strong>the</strong>r or not such an audit was necessary and whe<strong>the</strong>r it should be<br />
carried out by <strong>the</strong> OECD or o<strong>the</strong>r auditors designated by <strong>the</strong> <strong>IEA</strong> were<br />
questions for <strong>the</strong> Governing Board to decide. <strong>The</strong> Executive Director’s<br />
recommendation was that operational audits and any resulting actions<br />
should remain under Governing Board control. Such control was important<br />
for <strong>the</strong> following reasons: (1) since OECD auditors were appointed by <strong>the</strong><br />
OECD Council without <strong>IEA</strong> participation, those auditors could (and did at<br />
<strong>the</strong> time) include an <strong>of</strong>ficer from an OECD country which was not a<br />
Member <strong>of</strong> <strong>the</strong> Agency, (2) security and confidentiality questions could<br />
arise, and (3) under <strong>the</strong> OECD Financial Regulations <strong>the</strong> auditors report to<br />
<strong>the</strong> OECD Budget Committee, not to <strong>the</strong> <strong>IEA</strong> Budget Committee, and <strong>the</strong><br />
OECD Committee in turn transmits <strong>the</strong> report to <strong>the</strong> OECD Council, not to<br />
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<strong>the</strong> <strong>IEA</strong> Governing Board which bears <strong>the</strong> ultimate responsibility for <strong>IEA</strong><br />
operations. <strong>The</strong>se procedures could seriously impair <strong>the</strong> Governing Board’s<br />
financial control <strong>of</strong> <strong>the</strong> Agency and <strong>IEA</strong> autonomy provided in <strong>the</strong><br />
applicable legal texts. <strong>The</strong>se procedures failed to reflect <strong>the</strong> coherent line <strong>of</strong><br />
authority actually established within <strong>the</strong> <strong>IEA</strong>.<br />
Following discussions between <strong>the</strong> Executive Director and <strong>the</strong><br />
Secretary-General and deliberations within <strong>the</strong> <strong>IEA</strong> Budget Committee and<br />
Governing Board, <strong>the</strong> means were found for <strong>the</strong> <strong>IEA</strong> to enjoy <strong>the</strong> advantage<br />
<strong>of</strong> operational audits without weakening its autonomy. Instead <strong>of</strong><br />
establishing a separate <strong>IEA</strong> board <strong>of</strong> auditors, <strong>the</strong> <strong>IEA</strong> would accept <strong>the</strong><br />
operational audits by OECD Auditors subject to certain safeguard<br />
understandings and arrangements. <strong>The</strong> Agency was assured that <strong>the</strong> OECD<br />
auditors were independent outside experts fully bound to respect established<br />
rules <strong>of</strong> independence from any outside authority and to observe complete<br />
discretion. To resolve <strong>the</strong> procedural problem, <strong>the</strong> OECD Auditors would<br />
transmit <strong>the</strong>ir report on <strong>the</strong> audit to <strong>the</strong> Governing Board, and <strong>the</strong> <strong>IEA</strong><br />
Budget Committee would review <strong>the</strong> Auditors’ Report and provide its<br />
comments to <strong>the</strong> Governing Board. <strong>The</strong> Executive Director would transmit<br />
to <strong>the</strong> OECD Council <strong>the</strong> Auditors’ Report and inform <strong>the</strong> Council <strong>of</strong> any<br />
action <strong>the</strong>reon by <strong>the</strong> Governing Board. Should <strong>the</strong> Auditors’ Report result<br />
in any necessary action to be taken by <strong>the</strong> Council concerning <strong>the</strong> <strong>IEA</strong>, that<br />
action would be taken on <strong>IEA</strong> Budget proposals, with <strong>the</strong> <strong>IEA</strong> safeguards<br />
for Budget proposals, as provided in Article 10(b) <strong>of</strong> <strong>the</strong> Council Decision<br />
on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency (in which <strong>the</strong> Council would act<br />
pursuant to <strong>the</strong> agreement <strong>of</strong> those Agency Members which had voted in <strong>the</strong><br />
Governing Board to submit <strong>the</strong> proposals to <strong>the</strong> Council) [See Section D<br />
above for discussion <strong>of</strong> this procedure]. In that fashion, ultimate control<br />
over <strong>IEA</strong> matters arising out <strong>of</strong> <strong>the</strong> Audit would remain vested in <strong>the</strong><br />
Governing Board.<br />
<strong>The</strong> Governing Board adopted <strong>the</strong> corresponding Conclusions on 9<br />
April 1987 [<strong>IEA</strong>/GB(87)29, Item 4(a)]. <strong>The</strong> Board noted a statement in<br />
support <strong>of</strong> <strong>the</strong> “unique and independent nature” <strong>of</strong> <strong>the</strong> <strong>IEA</strong> and noted as<br />
well that<br />
<strong>the</strong> Audit should not become an exercise in micro-management<br />
and that <strong>the</strong> Executive Director must be allowed flexibility in<br />
applying <strong>the</strong> recommendations <strong>of</strong> <strong>the</strong> Auditors’ report.<br />
<strong>The</strong>reafter <strong>the</strong> OECD Auditors carried out <strong>the</strong>ir first <strong>IEA</strong> operational audit<br />
under <strong>the</strong> procedures outlined above. In <strong>the</strong>ir report, <strong>the</strong> Auditors made<br />
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observations on a few points, notably on <strong>the</strong> rate <strong>of</strong> utilization <strong>of</strong><br />
appropriations, on <strong>of</strong>ficial travel expenses, on representation expenses and<br />
on competitive bidding. <strong>The</strong> Budget Committee Chairman’s Report to <strong>the</strong><br />
Board noted <strong>the</strong> Auditors’ observations and <strong>the</strong> Executive Director’s<br />
responses [<strong>IEA</strong>/GB(88)16]. <strong>The</strong>reafter <strong>the</strong> Governing Board simply noted<br />
that Report and <strong>the</strong> oral report <strong>of</strong> <strong>the</strong> Budget Committee Chairman, <strong>the</strong>re<br />
being no need for o<strong>the</strong>r formal action to be taken on <strong>the</strong> Report<br />
[<strong>IEA</strong>/GB(88)28, Item 6(b)].<br />
<strong>The</strong> OECD Auditors have since carried out a second operational<br />
audit, for <strong>the</strong> 1991 Budget, initiated by a letter from <strong>the</strong> Chairman <strong>of</strong> <strong>the</strong><br />
Board <strong>of</strong> Auditors to <strong>the</strong> Executive Director. <strong>The</strong> Executive Director’s reply<br />
welcomed this audit, but again registered <strong>the</strong> points concerning <strong>IEA</strong><br />
autonomy that were made by <strong>the</strong> Governing Board in 1987. <strong>The</strong> exchange<br />
<strong>of</strong> letters was noted by <strong>the</strong> Board at its meeting on 9 December 1991<br />
[<strong>IEA</strong>/GB(91)79, Item 10(a); <strong>IEA</strong>/GB(91)77]. In <strong>the</strong>ir Report on <strong>the</strong> 1991<br />
Budget, <strong>the</strong> Auditors raised questions about <strong>the</strong> partial financing <strong>of</strong> <strong>the</strong> <strong>IEA</strong><br />
under Part I <strong>of</strong> <strong>the</strong> OECD Budget for 39 Combined Energy Staff posts, a<br />
question considered in detail in Section 7 above and in Chapter VI, Section<br />
D above, where <strong>the</strong> outcome <strong>of</strong> deliberations on this question is described.<br />
<strong>The</strong> Auditors also commented on <strong>the</strong> improved rate <strong>of</strong> utilization <strong>of</strong><br />
appropriations and <strong>the</strong> problem <strong>of</strong> increased mission costs. <strong>The</strong> Auditors’<br />
report on <strong>the</strong> accounts and financial management <strong>of</strong> <strong>the</strong> Agency for 1991<br />
was noted by <strong>the</strong> Governing Board at its October 1993 meeting<br />
[<strong>IEA</strong>/GB(93)57, Item 9(e)].<br />
While <strong>the</strong> operational audits were being carried out and considered in<br />
deliberative bodies during <strong>the</strong> period 1986-1993, <strong>the</strong> Auditors continued to<br />
carry out each year <strong>the</strong> routine financial examination <strong>of</strong> revenues and<br />
expenditures in <strong>the</strong> normal way. Those examinations as well as <strong>the</strong><br />
operational audits described above have proved to provide valuable support<br />
to <strong>the</strong> Executive Director’s administration <strong>of</strong> <strong>the</strong> Agency.<br />
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CHAPTER VIII<br />
General Principles <strong>of</strong> <strong>the</strong> Agency<br />
This Chapter is devoted to a number <strong>of</strong> <strong>IEA</strong> institutional topics which<br />
affect <strong>the</strong> Agency’s work in all sectors and at all structural levels. <strong>The</strong><br />
first <strong>of</strong> <strong>the</strong>se is <strong>the</strong> guiding principle <strong>of</strong> “operational efficiency”, one <strong>of</strong> <strong>the</strong><br />
hallmarks <strong>of</strong> <strong>the</strong> <strong>IEA</strong>. That topic is followed by “Security” which has<br />
particular importance for <strong>the</strong> <strong>IEA</strong> because <strong>of</strong> <strong>the</strong> Agency’s operational<br />
responsibilities in cases <strong>of</strong> oil supply disruptions and its need to hold and<br />
use sensitive data in that and o<strong>the</strong>r sectors <strong>of</strong> its work. <strong>The</strong>n follows<br />
consideration <strong>of</strong> “Languages” in <strong>the</strong> Agency, and finally general aspects <strong>of</strong><br />
<strong>IEA</strong> documentation, both <strong>of</strong> which have significant roles in <strong>IEA</strong> operations.<br />
A. Operational Efficiency<br />
<strong>The</strong> key rule establishing operational efficiency as <strong>the</strong> governing <strong>IEA</strong> maxim<br />
was adopted by <strong>the</strong> Governing Board at its first meeting on<br />
18 November <strong>1974</strong>, as follows:<br />
<strong>the</strong> Board would seek to proceed in a flexible way assuring<br />
maximum operational efficiency and simplicity [<strong>IEA</strong>/GB(74)9<br />
(1st Revision) Preliminary Matters, paragraph (d)].<br />
This principle was aimed at avoiding undue procedural formality. It<br />
found immediate application in <strong>the</strong> Board’s decisions on a number <strong>of</strong><br />
questions presented at its first meeting. Examples <strong>of</strong> <strong>the</strong> application <strong>of</strong> <strong>the</strong><br />
opera-tional efficiency principle, in <strong>the</strong> order in which <strong>the</strong>y occurred, include<br />
<strong>the</strong> following actions <strong>of</strong> <strong>the</strong> Governing Board: it deemed its meetings to be<br />
joint meetings <strong>of</strong> <strong>the</strong> Management Committee and <strong>the</strong> Governing Board, thus<br />
in practice dispensing with that Committee; it deferred <strong>the</strong> preparation <strong>of</strong><br />
systematic rules <strong>of</strong> procedure, which have never been found by <strong>the</strong> Board to<br />
be necessary to its work; it decided to dispense with formal minutes <strong>of</strong> its<br />
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meetings in <strong>the</strong> absence <strong>of</strong> a specific decision to <strong>the</strong> contrary; it decided to<br />
use French and German for important documents only, leaving English as<br />
<strong>the</strong> effective working language <strong>of</strong> <strong>the</strong> Agency (later modified); it decided to<br />
appoint <strong>the</strong> Executive Director without fixing a specific term <strong>of</strong> that <strong>of</strong>fice.<br />
Throughout <strong>the</strong> history <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong> operational efficiency<br />
principle has also been applied on a continuing basis in a number <strong>of</strong> notable<br />
practices: <strong>the</strong> general informality <strong>of</strong> Governing Board procedures, <strong>the</strong> absence<br />
<strong>of</strong> recorded voting procedures notwithstanding <strong>the</strong> elaborate <strong>IEA</strong> voting<br />
system, <strong>the</strong> use <strong>of</strong> consensus as <strong>the</strong> sole decision mechanism in practice, <strong>the</strong><br />
Chairman’s declaration <strong>of</strong> a decision when a majority is found to support a<br />
matter requiring majority or o<strong>the</strong>r applicable voting requirements are<br />
satisfied, <strong>the</strong> absence <strong>of</strong> a regular procedure for formal review <strong>of</strong> <strong>the</strong> Board’s<br />
Conclusions <strong>of</strong> <strong>the</strong> prior meeting (<strong>the</strong> Conclusions are presumed approved in<br />
<strong>the</strong> absence <strong>of</strong> objection at or before <strong>the</strong> next meeting), <strong>the</strong> conduct <strong>of</strong><br />
sensitive business outside <strong>of</strong> formal meetings and during breaks in <strong>the</strong> formal<br />
meetings, <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> Budget as a single Chapter under OECD rules<br />
(which allows for flexibility), <strong>the</strong> use <strong>of</strong> informal <strong>of</strong>f-<strong>the</strong>-record meetings<br />
usually away from <strong>IEA</strong> premises for sensitive questions or briefings, <strong>the</strong> use <strong>of</strong><br />
<strong>the</strong> written procedure for Governing Board decisions when necessary, and <strong>the</strong><br />
fixing <strong>of</strong> meeting frequency and duration according to <strong>the</strong> need to dispose <strong>of</strong><br />
current business ra<strong>the</strong>r than according to a pre-set or arbitrary schedule [For<br />
fur<strong>the</strong>r development <strong>of</strong> those topics, see Chapter V, Section A above].<br />
<strong>The</strong> same spirit pervades <strong>the</strong> Agency’s operations in virtually every<br />
sector. Particular applications will be noticed in Chapters IV, V, VI and VII<br />
above, as well as in <strong>the</strong> o<strong>the</strong>r Sections <strong>of</strong> this Chapter.<br />
B. Security<br />
<strong>The</strong> <strong>IEA</strong> security system was devised during <strong>the</strong> early years <strong>of</strong> <strong>the</strong> Agency<br />
principally to safeguard three categories <strong>of</strong> sensitive information: general oil<br />
market data, emergency supply data and political information concerning<br />
relations with non-Members. <strong>The</strong> OECD and o<strong>the</strong>r international<br />
organizations typically take fully adequate security measures to ensure <strong>the</strong><br />
security <strong>of</strong> personnel, <strong>the</strong> protection <strong>of</strong> premises and o<strong>the</strong>r property as well<br />
as a minimum level <strong>of</strong> information security, and <strong>the</strong> <strong>IEA</strong> receives <strong>the</strong><br />
benefits <strong>of</strong> such measures by virtue <strong>of</strong> its relationship with <strong>the</strong> OECD.<br />
However, <strong>the</strong> operational aspects <strong>of</strong> <strong>the</strong> I.E.P. required <strong>the</strong> Agency to go<br />
much fur<strong>the</strong>r in protecting sensitive information.<br />
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One <strong>of</strong> <strong>the</strong> main objectives <strong>of</strong> <strong>the</strong> <strong>IEA</strong> was to build a mechanism for<br />
increasing <strong>the</strong> transparency <strong>of</strong> <strong>the</strong> oil market, and particularly to ensure<br />
that <strong>the</strong> data necessary to operate <strong>the</strong> Emergency Sharing System would be<br />
available to <strong>the</strong> Agency in cases <strong>of</strong> oil supply disruptions. In certain<br />
situations that data would necessarily include commercial information from<br />
<strong>the</strong> oil companies co-operating with <strong>the</strong> <strong>IEA</strong>, and in particular oil company<br />
proprietary and confidential information. In order to enable governments<br />
and oil companies to supply <strong>the</strong> <strong>IEA</strong> with such data, <strong>the</strong> Agency needed to<br />
<strong>of</strong>fer protection from <strong>the</strong> disclosure <strong>of</strong> <strong>the</strong> data to unauthorized persons and<br />
entities. Commercial as well as legal considerations required <strong>the</strong><br />
establishment <strong>of</strong> a far-reaching security system in <strong>the</strong> <strong>IEA</strong>.<br />
While measures would have to be taken to protect this essentially<br />
commercial information, <strong>the</strong>re was also a political factor. Governments<br />
needed to exchange sensitive political information with <strong>the</strong> Secretariat and<br />
with <strong>the</strong>ir <strong>IEA</strong> partners in <strong>the</strong> bodies <strong>of</strong> <strong>the</strong> Agency. Sensitive political<br />
information would be taken up in <strong>the</strong> bodies dealing with international energy<br />
relations, principally in <strong>the</strong> Governing Board as well as in <strong>the</strong> Standing Group<br />
on Relations with Producer and o<strong>the</strong>r Consumer Countries and its successors<br />
in that domain. <strong>The</strong> Agency would function both as a caucus point and<br />
vehicle for exchange <strong>of</strong> sensitive information on “a purposeful dialogue” and<br />
for o<strong>the</strong>r forms <strong>of</strong> co-operation with those o<strong>the</strong>r countries as well as among<br />
<strong>the</strong> Members <strong>the</strong>mselves [See I.E.P. Agreement Articles 44 and 46]. <strong>The</strong><br />
sensitive nature <strong>of</strong> <strong>the</strong> information developed or exchanged in this context<br />
clearly called for effective measures <strong>of</strong> information security.<br />
It came as no surprise, <strong>the</strong>refore, that from <strong>the</strong> outset <strong>of</strong> <strong>the</strong> Agency<br />
<strong>the</strong> I.E.P Agreement contained a number <strong>of</strong> provisions for information<br />
security. Referring to <strong>the</strong> Information System overall, Article 25.2 <strong>the</strong><br />
I.E.P. Agreement provides that<br />
<strong>The</strong> System shall be operated on a permanent basis, both under<br />
normal conditions and during emergencies, and in a manner<br />
which ensures <strong>the</strong> confidentiality <strong>of</strong> <strong>the</strong> information made<br />
available [Emphasis added].<br />
Article 27.3 states that Members are to “provide information on a nonproprietary<br />
basis and on a company and/or country basis as appropriate,<br />
and in such a manner and degree as will not prejudice competition or<br />
conflict with <strong>the</strong> legal requirements <strong>of</strong> any Participating Country relating to<br />
competition”. For <strong>the</strong> General Section <strong>of</strong> <strong>the</strong> Information System, <strong>the</strong><br />
Standing Group on <strong>the</strong> Oil Market was required to “work out procedures to<br />
319
ensure <strong>the</strong> confidentiality <strong>of</strong> <strong>the</strong> information” [Article 30], and <strong>the</strong> Standing<br />
Group on Emergency Questions was required to do <strong>the</strong> same for <strong>the</strong><br />
“Special” or emergency Section [Article 35].<br />
<strong>The</strong> two Standing Groups were specifically directed in <strong>the</strong> I.E.P.<br />
Agreement to report to <strong>the</strong> Governing Board promptly on those and o<strong>the</strong>r<br />
elements <strong>of</strong> <strong>the</strong> Information System. <strong>The</strong> Governing Board would make <strong>the</strong><br />
final decisions regarding information security (for <strong>the</strong>re was no delegation<br />
<strong>of</strong> decision making power), and <strong>the</strong> Governing Board did so with respect to<br />
information security by adopting on 12 April 1976 <strong>the</strong> “Security Principles<br />
and Procedures” <strong>of</strong> <strong>the</strong> <strong>IEA</strong> [See <strong>IEA</strong>/GB(76)24, Item 7; <strong>the</strong> full text as<br />
amended is contained in <strong>IEA</strong>/GB(77)12].<br />
Ano<strong>the</strong>r key reason for establishing and maintaining an adequate<br />
security system was <strong>the</strong> national need for it expressed by senior <strong>of</strong>ficials in<br />
Member countries. In <strong>the</strong> United States, for example, those views took <strong>the</strong><br />
form <strong>of</strong> legislation that would make <strong>the</strong> co-operation <strong>of</strong> U. S. <strong>of</strong>ficials and<br />
oil companies all but impossible in <strong>the</strong> absence <strong>of</strong> an acceptable security<br />
system. <strong>The</strong> Energy Policy and Conservation Act <strong>of</strong> 1975 (EPCA), as<br />
amended, provides authority in section 254(a)(1) and (2)B(ii) [CCH,<br />
Energy Management, <strong>Vol</strong>. 2, 10,850, 10,881] for <strong>the</strong> Secretary <strong>of</strong> Energy<br />
under specified circumstances to transmit to <strong>the</strong> <strong>IEA</strong> certain sensitive<br />
information and data related to <strong>the</strong> energy industry, in disaggregated form:<br />
if <strong>the</strong> President (<strong>of</strong> <strong>the</strong> United States) certifies, after opportunity<br />
for presentation <strong>of</strong> views by interested persons, that <strong>the</strong><br />
International Energy Agency has adopted and is implementing<br />
security measures which assure that such information will not<br />
be disclosed by such Agency or its employees to any person or<br />
foreign country without having been aggregated, accumulated,<br />
or o<strong>the</strong>rwise reported in such manner as to void identification<br />
<strong>of</strong> any person from whom <strong>the</strong> United States obtained such<br />
information or data [Emphasis added].<br />
<strong>The</strong> sanction <strong>of</strong> EPCA section 254 — and a potentially severe sanction it is<br />
— is contained in its paragraph (b) as follows:<br />
If <strong>the</strong> President determines that <strong>the</strong> transmittal <strong>of</strong> data or information<br />
pursuant to <strong>the</strong> authority <strong>of</strong> this section would prejudice<br />
competition, violate <strong>the</strong> antitrust laws, or be inconsistent with<br />
United States national security interests, he may require that such<br />
data or information not be transmitted.<br />
3<strong>20</strong>
Parallel questions <strong>of</strong> aggregation and protection <strong>of</strong> data submitted<br />
under <strong>the</strong> Emergency Sharing System arose from <strong>the</strong> requirements <strong>of</strong> <strong>the</strong> U.<br />
S. antitrust regulatory network. For <strong>the</strong> antitrust defense to be available to<br />
participating oil companies, paragraph 5 <strong>of</strong> <strong>the</strong> Antitrust <strong>Vol</strong>untary<br />
Agreement and Plan <strong>of</strong> Action [CCH, Energy Management, <strong>Vol</strong>. 3,<br />
15,845] provides for confidential or proprietary information to be<br />
transmitted by participating companies to <strong>the</strong> <strong>IEA</strong>, when approved by U. S.<br />
authorities in writing, only if such information is aggregated or o<strong>the</strong>rwise<br />
compiled by <strong>the</strong> U. S. authorities “or <strong>the</strong> <strong>IEA</strong>” to prevent, to <strong>the</strong> extent<br />
possible, <strong>the</strong> identification <strong>of</strong> individual company data or information<br />
before being disclosed to or exchanged with o<strong>the</strong>rs in specified<br />
circumstances, unless unaggregated information is necessary to develop,<br />
prepare or test emergency allocation measures. In an actual emergency<br />
such written authorization would also have to be given. During incipient<br />
crises, when <strong>the</strong> U. S. authorities gave <strong>the</strong>ir approval for <strong>the</strong> transmission <strong>of</strong><br />
such data to <strong>the</strong> <strong>IEA</strong>, <strong>the</strong> approval letter stated <strong>the</strong> general understanding<br />
that <strong>the</strong> <strong>IEA</strong> would not “. . . disseminate any disaggregated QA data (i.e.<br />
Questionnaire A data, <strong>the</strong> sensitive data, described fur<strong>the</strong>r below, provided<br />
by co-operating oil companies for use in connection with <strong>the</strong> <strong>IEA</strong>’s oil<br />
Emergency Sharing System) to any o<strong>the</strong>r company or to any o<strong>the</strong>r person<br />
outside <strong>the</strong> Secretariat” [Letters from <strong>the</strong> U. S. Department <strong>of</strong> Energy to<br />
<strong>IEA</strong> Reporting Companies during <strong>the</strong> 1979-1981 and 1990-1991 oil crisis<br />
periods; copies held in <strong>the</strong> <strong>IEA</strong> Office <strong>of</strong> Legal Counsel].<br />
<strong>The</strong> implementation <strong>of</strong> <strong>the</strong>se measures discussed above, as well as<br />
o<strong>the</strong>r requirements during emergencies or tests <strong>of</strong> <strong>the</strong> System, require that<br />
<strong>the</strong> <strong>IEA</strong> security system function at all times. <strong>The</strong> information security<br />
system must <strong>the</strong>refore be operated regularly even in relatively quiet times,<br />
in order to ensure effectiveness when unexpected events might suddenly<br />
flood <strong>the</strong> Agency with sensitive data in need <strong>of</strong> protection. Still, <strong>the</strong><br />
operation <strong>of</strong> <strong>the</strong> <strong>IEA</strong> security system is necessary in any case on a regular<br />
basis, for sensitive data are almost always present on <strong>IEA</strong> premises. For<br />
example, sensitive political information involving <strong>the</strong> operations <strong>of</strong> oil<br />
producer countries is <strong>of</strong>ten present in connection with deliberations <strong>of</strong> <strong>the</strong><br />
Non-Member Countries Committee and with Secretariat contacts with non-<br />
Members. However, <strong>the</strong> systematic presence <strong>of</strong> individual oil company data<br />
during certain periods has presented particular problems <strong>of</strong> protection.<br />
Individual oil company data were provided to <strong>the</strong> <strong>IEA</strong> in <strong>the</strong> late 1970s and<br />
early 1980s under a system known at <strong>the</strong> time as <strong>the</strong> “Price Register”. As<br />
received in <strong>the</strong> <strong>IEA</strong>, this data was aggregated in such a way that individual<br />
company transaction prices could not be determined, under a computer<br />
321
procedure known as <strong>the</strong> “Black Box” system which made <strong>the</strong> individual<br />
company data inaccessible. Since <strong>the</strong> discontinuance <strong>of</strong> <strong>the</strong> “Crude Oil Cost<br />
Information System” in 1984, sensitive individual company price<br />
information has not been collected and thus it has not presented protection<br />
problems.<br />
Protection has been necessary for sensitive oil supply information<br />
received periodically in <strong>the</strong> Agency for tests <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Emergency Sharing<br />
System (<strong>the</strong>re have been seven tests to date), and in connection with two<br />
periods <strong>of</strong> oil supply disruption (1979-1981 and 1990-1991) when <strong>IEA</strong><br />
emergency Questionnaires A and B were activated and produced<br />
information which proved to be quite useful in coping with <strong>the</strong> crises.<br />
Those Questionnaires call for individual oil company data for periods <strong>of</strong> five<br />
months (<strong>the</strong> two prior months, <strong>the</strong> present month and two forward months)<br />
on <strong>the</strong> company’s operations in each <strong>IEA</strong> Member country, as well as<br />
detailed information on trade flows to or from some thirty-two non-Member<br />
countries. <strong>The</strong> reported data include indigenous production, imports,<br />
exports, stock levels, and changes in oil consumption and crude oil stocks at<br />
sea for each period. Those data are submitted by each <strong>of</strong> <strong>the</strong> approximately<br />
forty companies which have agreed to do so under voluntary arrangements<br />
for <strong>the</strong>m to co-operate with <strong>the</strong> <strong>IEA</strong> under <strong>the</strong> rubric <strong>of</strong> “Reporting<br />
Companies”. Under Questionnaire B, each <strong>IEA</strong> Member government<br />
supplies parallel data on Non-Reporting companies as well as Reporting<br />
companies operating in its territory, and supplies additional stock data as<br />
well.<br />
Much <strong>of</strong> <strong>the</strong> individual company data supplied under that system is<br />
particularly sensitive. It receives <strong>the</strong> Agency’s highest security classification,<br />
called “<strong>IEA</strong> SECRET”, described below, and it is protected in accordance<br />
with <strong>the</strong> rules <strong>of</strong> that classification. Responses to <strong>the</strong> Questionnaires have<br />
been received and held on <strong>IEA</strong> premises in connection with each <strong>of</strong> <strong>the</strong><br />
Allocation Systems Tests (ASTs) since April 1978, that is in ASTs 2 through 7,<br />
beginning for each Test with preliminary data transmission tests and<br />
continuing during <strong>the</strong> one to two month period <strong>of</strong> each Test and <strong>the</strong>reafter.<br />
Full security protection is afforded sensitive test information, even though<br />
for test purposes <strong>the</strong> transmitters <strong>of</strong> <strong>the</strong> information are entitled to<br />
“disrupt” or “mask” <strong>the</strong> data in such a way as to make it <strong>of</strong> doubtful utility<br />
to unauthorized persons. Whe<strong>the</strong>r <strong>the</strong> data are actually disrupted or not is<br />
unknown, but <strong>the</strong> mere possibility <strong>of</strong> such disruption would presumably<br />
affect its usefulness outside <strong>of</strong> <strong>the</strong> Tests. In <strong>the</strong> two cases <strong>of</strong> activation <strong>of</strong><br />
Questionnaires A and B during actual or potential supply disruptions,<br />
during <strong>the</strong> Second Oil Crisis <strong>of</strong> 1979-1981 and during <strong>the</strong> Gulf Crisis <strong>of</strong><br />
322
1990-1991, <strong>the</strong> actual, undisrupted data were supplied to <strong>the</strong> <strong>IEA</strong> in Paris<br />
and required full security protection. <strong>The</strong> security system has been<br />
successfully applied as required and without incident.<br />
<strong>The</strong> <strong>IEA</strong> security system is operated under <strong>the</strong> Governing Board’s<br />
decision entitled “Security Principles and Procedures” [as revised in<br />
<strong>IEA</strong>/GB(77)7; for <strong>the</strong> full text see <strong>IEA</strong>/GB(77)12 dated 1 March 1977].<br />
<strong>The</strong> system was established in order “to safeguard against unauthorised<br />
disclosure <strong>of</strong> sensitive information”. In adopting that decision, <strong>the</strong><br />
Governing Board also recorded in its Conclusions [<strong>IEA</strong>/GB(77)7, Item 7<br />
(c)-(d)] <strong>the</strong> Members’ agreements concerning security clearances for certain<br />
Combined Energy Staff [See Chapter VI, Section D on <strong>the</strong> Combined<br />
Energy Staff], to be effected through equivalent national security<br />
classifications and <strong>the</strong> conduct <strong>of</strong> security clearance checks. Those security<br />
checks are intended to increase <strong>the</strong> protection <strong>of</strong> sensitive information to<br />
which <strong>the</strong> Staff Members are given access in <strong>the</strong> course <strong>of</strong> <strong>the</strong>ir work.<br />
In paragraph 1 <strong>of</strong> <strong>the</strong> decision <strong>the</strong> Executive Director was empowered<br />
to adopt Security Regulations <strong>of</strong> <strong>the</strong> Agency to implement <strong>the</strong> Principles<br />
and Procedures. <strong>The</strong> Executive Director carried out that mandate on<br />
1 November 1977 by adopting <strong>the</strong> Security Regulations <strong>of</strong> <strong>the</strong> Agency<br />
[<strong>IEA</strong>/ED(77)398] which define <strong>the</strong> security obligations <strong>of</strong> Staff Members,<br />
set out detailed information and instructions on <strong>the</strong> security system and<br />
contain examples <strong>of</strong> appropriate forms. In addition, technical and<br />
operational details for <strong>the</strong> assistance <strong>of</strong> successive security <strong>of</strong>ficers were set<br />
forth in an <strong>IEA</strong> Security Procedural Manual.<br />
1. Brief Description <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Security System<br />
<strong>The</strong> system contains elements governing document classification and<br />
handling, personnel procedures and physical security <strong>of</strong> <strong>the</strong> <strong>IEA</strong> premises,<br />
as provided in <strong>the</strong> <strong>IEA</strong> legislative instruments described above. <strong>The</strong> system<br />
does not require any initiation or triggering actions to become operative. It<br />
is in force and applicable in accordance with its terms at all times.<br />
All <strong>of</strong>ficial material which requires protection against unauthorized<br />
disclosure is classified in one <strong>of</strong> <strong>the</strong> following categories [Security Principles<br />
and Procedures, paragraph 19-A]:<br />
(1) <strong>IEA</strong> SECRET: All material <strong>of</strong> a highly sensitive nature, <strong>the</strong><br />
unauthorised disclosure <strong>of</strong> which could cause grave<br />
damage to <strong>the</strong> functioning <strong>of</strong> <strong>the</strong> OECD, <strong>the</strong> <strong>IEA</strong> or <strong>the</strong><br />
interests <strong>of</strong> any Member government <strong>of</strong> ei<strong>the</strong>r organization.<br />
323
(2) <strong>IEA</strong> HIGHLY CONFIDENTIAL: All material <strong>of</strong> a sensitive<br />
nature, <strong>the</strong> unauthorised disclosure <strong>of</strong> which could cause damage<br />
to or seriously prejudice <strong>the</strong> interests <strong>of</strong> <strong>the</strong> OECD, <strong>the</strong> <strong>IEA</strong> or <strong>the</strong><br />
interests <strong>of</strong> any Member government <strong>of</strong> ei<strong>the</strong>r, and which<br />
requires special protection and handling and limited access.<br />
(3) CONFIDENTIAL: All material <strong>of</strong> a sensitive nature, <strong>the</strong> unauthorised<br />
disclosure <strong>of</strong> which could cause damage to or seriously<br />
prejudice <strong>the</strong> interests <strong>of</strong> <strong>the</strong> OECD, <strong>the</strong> <strong>IEA</strong> or <strong>the</strong> interests <strong>of</strong><br />
any Member government <strong>of</strong> ei<strong>the</strong>r (Note that this classification<br />
corresponds to <strong>the</strong> OECD classification <strong>of</strong> <strong>the</strong> same name).<br />
(4) RESTRICTED: All material which is for <strong>of</strong>ficial use only and<br />
which should not be disclosed to <strong>the</strong> press or general public<br />
(Note that this classification also corresponds to <strong>the</strong> OECD<br />
classification <strong>of</strong> <strong>the</strong> same name).<br />
(5) UNCLASSIFIED: All material which could be released to <strong>the</strong><br />
press or <strong>the</strong> general public (Note that this classification includes<br />
material not required to be classified under <strong>the</strong> <strong>IEA</strong> security<br />
system as well as derestricted material. This category corresponds<br />
to <strong>the</strong> OECD classification “For General Distribution”).<br />
Classified material received from governments or o<strong>the</strong>r sources is<br />
assigned an equivalent Agency classification. All sensitive oil company data<br />
pertaining to less than three companies are classified “<strong>IEA</strong> SECRET”. <strong>The</strong><br />
originator <strong>of</strong> a classified document in <strong>the</strong> Agency assigns it an appropriate<br />
classification at <strong>the</strong> time <strong>the</strong> document is prepared. Final classification <strong>of</strong> “<strong>IEA</strong><br />
SECRET” or “<strong>IEA</strong> HIGHLY CONFIDENTIAL” must be made or approved by<br />
<strong>the</strong> Executive Director or by <strong>of</strong>ficials specifically designated by <strong>the</strong> Executive<br />
Director. Pursuant to review and re-classification procedures, down-grading<br />
may be effected by <strong>the</strong> <strong>of</strong>ficial authorizing <strong>the</strong> original classification, but “<strong>IEA</strong><br />
SECRET” or “<strong>IEA</strong> HIGHLY CONFIDENTIAL” material may be downgraded<br />
or declassified only by <strong>the</strong> Executive Director or <strong>of</strong>ficials specifically designated<br />
by <strong>the</strong> Executive Director. Such action as respects documents originating from<br />
outside <strong>the</strong> Agency requires <strong>the</strong> express authority <strong>of</strong> <strong>the</strong> originator.<br />
Each document is marked to show its classification clearly. “<strong>IEA</strong><br />
SECRET” or “<strong>IEA</strong> HIGHLY CONFIDENTIAL” is so marked at <strong>the</strong> top and<br />
bottom <strong>of</strong> each page, including <strong>the</strong> cover, and upon each envelope or file<br />
folder. Such material may be reproduced or translated only upon <strong>the</strong><br />
specific authorization <strong>of</strong> <strong>the</strong> Executive Director or <strong>of</strong> <strong>of</strong>ficials specifically<br />
designated by <strong>the</strong> Executive Director, and only within <strong>IEA</strong> premises. Each<br />
copy is numbered, and a distribution list <strong>of</strong> <strong>the</strong> strictly limited reproduction<br />
324
copies is maintained. Within <strong>the</strong> Agency all “<strong>IEA</strong> SECRET” and “<strong>IEA</strong><br />
HIGHLY CONFIDENTIAL” material is maintained in security cover sheets<br />
and is stored in locked safes with three-way combination locks, pursuant to<br />
<strong>the</strong> Agency’s rules governing physical security. “CONFIDENTIAL” and<br />
“RESTRICTED” material is handled in accordance with normal OECD<br />
procedures, which means for <strong>the</strong> <strong>IEA</strong> that it is held on locked and guarded<br />
<strong>IEA</strong> premises.<br />
“<strong>IEA</strong> SECRET” documents may not be distributed outside <strong>of</strong> <strong>IEA</strong><br />
premises. “<strong>IEA</strong> HIGHLY CONFIDENTIAL” documents may be distributed<br />
outside <strong>IEA</strong> premises, but only upon <strong>the</strong> express prior authorization <strong>of</strong> <strong>the</strong><br />
Executive Director or <strong>of</strong>ficials specifically designated by <strong>the</strong> Executive<br />
Director; such distribution will be made pursuant to <strong>the</strong> recipient<br />
government’s agreement to assign <strong>the</strong> material an equivalent national<br />
security classification and to afford such material <strong>the</strong> same safeguards<br />
concerning access, handling and storage that it applies to its own material<br />
bearing an equivalent classification.<br />
In practice <strong>the</strong> “<strong>IEA</strong> SECRET” classification has been employed<br />
sparingly, except for <strong>the</strong> individual oil company sensitive information (<strong>of</strong>ten<br />
called “confidential and proprietary information”) that was received under<br />
Questionnaires A and B during <strong>the</strong> two supply shortfalls and in connection<br />
with <strong>the</strong> ASTs mentioned above. On those occasions abundant “<strong>IEA</strong><br />
SECRET” information was present in <strong>the</strong> Agency, and it was used on a<br />
“need to know basis” by selected members <strong>of</strong> <strong>the</strong> Secretariat who held <strong>the</strong><br />
requisite security clearances or for whom <strong>the</strong> necessary application had<br />
been made, and (in <strong>the</strong> ASTs) also by members <strong>of</strong> <strong>the</strong> Industry Supply<br />
Advisory Group (ISAG) on a “need to know basis.” Such information was<br />
never allowed to leave <strong>IEA</strong> premises, even to be used by <strong>the</strong> Secretariat for<br />
<strong>of</strong>ficial purposes. Requests to use such information in ISAG briefing sessions<br />
away from <strong>IEA</strong> premises have been denied. While such data can be removed<br />
with <strong>the</strong> permission <strong>of</strong> <strong>the</strong> originating company or government, <strong>the</strong>re has<br />
been a positive response to <strong>the</strong> only request made for that purpose to a<br />
group <strong>of</strong> originators, as will be described below. Even when <strong>the</strong> information<br />
has become stale, after being held for some years, <strong>the</strong> classification is<br />
maintained, and <strong>the</strong> originator’s consent would be required for its removal<br />
even on a temporary basis. Such data is supplied to <strong>the</strong> Agency only for <strong>the</strong><br />
purpose specified by <strong>the</strong> request, ei<strong>the</strong>r for an AST or for an actual or<br />
potential supply disruption, and <strong>the</strong> data may not be employed within <strong>the</strong><br />
Agency for any o<strong>the</strong>r purposes.<br />
<strong>The</strong> only exception to <strong>the</strong> non-removal rule has been made to satisfy<br />
United States antitrust record keeping rules. U. S. companies and <strong>the</strong>ir<br />
325
epresentatives are required to provide U. S. government authorities with<br />
certain information furnished or exchanged in <strong>the</strong> course <strong>of</strong> designated <strong>IEA</strong><br />
activities. Much <strong>of</strong> that information is furnished directly by <strong>the</strong> companies<br />
concerned, but at times it is convenient for <strong>the</strong> same data to be supplied<br />
from <strong>the</strong> <strong>IEA</strong> premises. U. S. antitrust as well as European Community<br />
monitors are present on <strong>IEA</strong> premises during <strong>the</strong> ASTs and <strong>the</strong>y would be<br />
expected to be present as well during activation <strong>of</strong> <strong>the</strong> Emergency Sharing<br />
System. Monitors have been given access as required by <strong>the</strong> rules to all<br />
information seen by <strong>the</strong> oil company <strong>of</strong>ficers working with <strong>the</strong> Secretariat.<br />
In <strong>the</strong> course <strong>of</strong> <strong>the</strong> ASTs, <strong>the</strong> Secretariat has permitted <strong>the</strong> U. S. antitrust<br />
monitors to remove under <strong>IEA</strong> rules certain sensitive information only when<br />
required by law. <strong>The</strong>se arrangements have proven to be somewhat<br />
burdensome but <strong>the</strong>y have not o<strong>the</strong>rwise presented serious difficulties.<br />
In connection with <strong>the</strong> 1992 Allocation Systems Test (AST-7), <strong>the</strong><br />
United States authorities requested copies <strong>of</strong> written records <strong>of</strong> all AST-7<br />
voluntary <strong>of</strong>fers by <strong>IEA</strong> Reporting Companies, including <strong>the</strong> actions taken.<br />
Although this request raised a problem <strong>of</strong> <strong>the</strong> Agency’s release <strong>of</strong> sensitive<br />
information, <strong>the</strong> <strong>IEA</strong> established a workable procedure for responding to<br />
<strong>the</strong> request. <strong>The</strong> U.S. company information presented no difficulty because<br />
that information was to be made available to <strong>the</strong> U. S. authorities in any<br />
event by <strong>the</strong> companies concerned. With regard to non-U. S. company<br />
information, <strong>the</strong> Agency sought and received permission <strong>of</strong> those companies<br />
for <strong>the</strong> release <strong>of</strong> <strong>the</strong> information, and <strong>the</strong> Agency <strong>the</strong>n released it to U.S.<br />
antitrust authorities. This was accompanied by an <strong>IEA</strong> request that <strong>the</strong><br />
documents be employed solely for stated antitrust purposes. <strong>The</strong><br />
documents were classified “<strong>IEA</strong> HIGHLY CONFIDENTIAL” and were <strong>the</strong><br />
subject <strong>of</strong> written requests that <strong>the</strong> U. S. authorities to assign <strong>the</strong>m “an<br />
equivalent national security classification” and to ensure “that <strong>the</strong>y be<br />
accorded <strong>the</strong> same safeguards regarding access, handling and storage as are<br />
applied to U. S. material in <strong>the</strong> equivalent classification category” [Letter<br />
Bamberger/Samuel Bradley, 24 May 1993, <strong>IEA</strong>/OLC(93)72].<br />
<strong>The</strong> handling <strong>of</strong> “<strong>IEA</strong> HIGHLY CONFIDENTIAL” documents has<br />
seldom presented difficulties. In fact <strong>the</strong>re have been fewer documents<br />
bearing that classification than <strong>the</strong> o<strong>the</strong>r classifications, and <strong>the</strong>y have<br />
frequently contained sensitive information <strong>of</strong> a political nature ra<strong>the</strong>r than<br />
individual oil company information. Documents bearing this classification<br />
are, for <strong>the</strong> most part treated like “<strong>IEA</strong> SECRET”, documents with one<br />
major exception. “<strong>IEA</strong> HIGHLY CONFIDENTIAL” documents may be<br />
removed from <strong>IEA</strong> premises without <strong>the</strong> permission <strong>of</strong> <strong>the</strong> originator, but<br />
special protective rules apply. In fact that distinction was <strong>the</strong> origin <strong>of</strong> “<strong>IEA</strong><br />
326
HIGHLY CONFIDENTIAL” as a separate classification, for “<strong>IEA</strong> SECRET”<br />
documents could not be so removed. Under appropriate safeguards, and<br />
particularly for political information which might need to be disseminated<br />
among Member governments, <strong>the</strong> “<strong>IEA</strong> HIGHLY CONFIDENTIAL”<br />
classification was invented to make it possible to remove such information<br />
from <strong>IEA</strong> premises with a minimum <strong>of</strong> difficulty.<br />
CONFIDENTIAL and RESTRICTED information circulates in and<br />
out <strong>of</strong> <strong>IEA</strong> premises much as it does in <strong>the</strong> OECD. This information is<br />
disseminated outside <strong>IEA</strong> premises to interested OECD <strong>of</strong>fices and to<br />
Member Delegations, or as may be authorized under <strong>the</strong> rules <strong>of</strong> <strong>the</strong> system.<br />
Many Governing Board Conclusions have been classified as<br />
CONFIDENTIAL, as have many Governing Board, Standing Group and<br />
Committee documents. Internal documents <strong>of</strong> a sensitive nature, such as<br />
documents disclosing negotiating positions or o<strong>the</strong>r political or operational<br />
sensitivities are classified CONFIDENTIAL, but most documents prepared<br />
for <strong>IEA</strong> bodies or for internal purposes are classified simply as<br />
RESTRICTED. Indeed, most internal papers bear no <strong>of</strong>ficial classification<br />
at all; however, because <strong>of</strong> <strong>the</strong>ir <strong>of</strong>ficial nature, <strong>the</strong>y have been regarded as<br />
not suitable for dissemination outside <strong>of</strong> <strong>the</strong> Agency or for <strong>the</strong> press. <strong>The</strong>y<br />
are thus tantamount to RESTRICTED documents and are handled<br />
carefully.<br />
<strong>The</strong> fundamental rule governing <strong>the</strong> security responsibilities <strong>of</strong> all<br />
<strong>IEA</strong> Staff is set forth in <strong>the</strong> first sentence <strong>of</strong> paragraph 19 <strong>of</strong> <strong>the</strong> Security<br />
Principles and Procedures. It provides that “Each Staff member who has<br />
knowledge or custody <strong>of</strong> classified information has a basic responsibility for<br />
maintaining its security”. <strong>The</strong> rule is supplemented by <strong>the</strong> requirement that<br />
“Each supervisor has <strong>the</strong> ultimate responsibility <strong>of</strong> assuring that all<br />
classified information entrusted to his unit is protected” in accordance with<br />
<strong>the</strong> procedures set out in paragraph 19, which include <strong>the</strong> security<br />
classifications, <strong>the</strong> authority to classify, downgrade and declassify, <strong>the</strong><br />
marking <strong>of</strong> documents, <strong>the</strong> limitation <strong>of</strong> access to sensitive material, <strong>the</strong><br />
limited dissemination <strong>of</strong> classified documents, and rules about <strong>the</strong>ir<br />
destruction, translations, protection and storage.<br />
Security clearances are required for those Combined Energy Staff<br />
Members and for o<strong>the</strong>r persons (such as interpreters and translators)<br />
assigned to duty with <strong>the</strong> Staff or to service <strong>IEA</strong> meetings, who will have<br />
access to material classified “<strong>IEA</strong> SECRET” or will regularly have access to<br />
material classified “<strong>IEA</strong> HIGHLY CONFIDENTIAL”. A security clearance<br />
will be granted by <strong>the</strong> individual’s national government after a security<br />
examination conducted according to <strong>the</strong> same procedures (including<br />
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procedures for obtaining information from o<strong>the</strong>r countries) which <strong>the</strong><br />
government applies for clearances it grants for access to information<br />
bearing an equivalent national security classification. <strong>IEA</strong> Security<br />
Regulation 2-5 provides for <strong>the</strong> clearances to be updated every five years for<br />
Staff who continue to have access to sensitive information. Although many<br />
<strong>IEA</strong> Staff will have moved on to o<strong>the</strong>r employment during that period<br />
because <strong>of</strong> <strong>the</strong> Agency’s policies on <strong>the</strong> term <strong>of</strong> appointments, <strong>the</strong>re have<br />
been only a few cases where updating <strong>of</strong> clearances has been sought.<br />
Members <strong>of</strong> <strong>the</strong> Secretariat have not been granted access to “<strong>IEA</strong><br />
SECRET” or “<strong>IEA</strong> HIGHLY CONFIDENTIAL” information unless <strong>the</strong>re<br />
was in effect a security clearance for <strong>the</strong> individual (or an appropriate<br />
application had been made), and unless <strong>the</strong> individual had <strong>the</strong> requisite<br />
“need-to-know” and had undertaken a contractual obligation not to reveal<br />
<strong>the</strong> information to unauthorized persons both during and after <strong>the</strong> Staff<br />
Member’s term <strong>of</strong> employment. For “<strong>IEA</strong> SECRET” information, moreover,<br />
<strong>the</strong> Governing Board is consulted concerning such access by <strong>the</strong> particular<br />
individual.<br />
Clearances have been sought for individuals who hold sensitive posts<br />
or may o<strong>the</strong>rwise require access to sensitive information in order to carry<br />
out <strong>the</strong>ir functions, including Staff Members who may be reassigned to<br />
sensitive work temporarily during ASTs or periods <strong>of</strong> actual or foreseeable<br />
oil supply disruptions. After each clearance is received, <strong>the</strong> individual’s<br />
name is submitted to <strong>the</strong> Governing Board for <strong>the</strong> consultation (for this is<br />
done not by post or function description, but for each individual as such).<br />
<strong>The</strong> submissions are usually grouped as a convenience to <strong>the</strong> Board. In no<br />
case to-date has a consultation resulted in a negative response from <strong>the</strong><br />
Governing Board.<br />
If a national government withdraws a security clearance granted by it,<br />
<strong>the</strong> Executive Director will deny <strong>the</strong> individual fur<strong>the</strong>r access to <strong>the</strong><br />
information. Unauthorized disclosure renders <strong>the</strong> Staff Member liable to<br />
disciplinary measures, including dismissal in appropriate cases under OECD<br />
rules and procedures. None <strong>of</strong> those actions has been necessary up to <strong>the</strong><br />
present time.<br />
Since security awareness is a matter <strong>of</strong> training as well as personal<br />
integrity, <strong>the</strong> <strong>IEA</strong> system requires that all persons appointed to <strong>the</strong> Staff,<br />
ei<strong>the</strong>r temporarily or permanently, regardless <strong>of</strong> <strong>the</strong> individual’s status<br />
regarding access to sensitive information, be provided with a copy <strong>of</strong> <strong>the</strong><br />
Security Regulations and be briefed <strong>the</strong>reon by <strong>the</strong> Security Officer.<br />
Follow-up security briefings are provided to each Staff Member semiannually.<br />
<strong>The</strong>se provide an opportunity to review <strong>the</strong> basic rules, to<br />
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enlarge upon matters <strong>of</strong> current concern and to provide Staff Members<br />
with a regular occasion to raise pertinent questions with <strong>the</strong> Security<br />
Officer.<br />
<strong>The</strong> physical security <strong>of</strong> <strong>the</strong> premises occupied by <strong>the</strong> Agency (<strong>the</strong><br />
entire third floor and part <strong>of</strong> <strong>the</strong> fourth floor <strong>of</strong> <strong>the</strong> OECD building located<br />
at 19, rue de Franqueville in Paris) is assured by a single entrance and exit<br />
controlled by Agency guards and <strong>the</strong> premises are fur<strong>the</strong>r protected by an<br />
alarm system. Strict visitor control procedures are employed, including<br />
accurate identification, registration and escort while on <strong>IEA</strong> premises. <strong>The</strong><br />
escort is responsible for <strong>the</strong> visitor until he or she leaves <strong>the</strong> Agency<br />
premises or is taken by ano<strong>the</strong>r escort for fur<strong>the</strong>r visit <strong>of</strong> <strong>the</strong> Agency. <strong>The</strong><br />
visitor is not to be free to move about <strong>the</strong> Agency on his own or her own at<br />
any time. Security is fur<strong>the</strong>r assured by a closed-circuit television system<br />
for monitoring access to sensitive data areas, and that system can be<br />
expanded in an emergency to monitor additional areas in which sensitive<br />
documents might be used or stored. Under <strong>IEA</strong> document security rules<br />
<strong>IEA</strong> guards make daily security checks after normal duty hours <strong>of</strong> each<br />
<strong>of</strong>fice on <strong>IEA</strong> premises to ensure that no classified documents are left<br />
unsecured [Security Principles and Procedures, paragraph 5]. <strong>The</strong> guards<br />
secure any exposed material and report to <strong>the</strong> Security Officer who will<br />
recommend any appropriate administrative or disciplinary action regarding<br />
<strong>the</strong> violation. Sensitive material is stored in special safes under <strong>the</strong> control<br />
<strong>of</strong> responsible <strong>of</strong>ficers, while computer security is assured by restricted<br />
access, by <strong>the</strong> use <strong>of</strong> access codes, and by o<strong>the</strong>r measures under <strong>the</strong> control<br />
<strong>of</strong> <strong>the</strong> Information Systems Division <strong>of</strong> <strong>the</strong> Secretariat. “<strong>IEA</strong> SECRET” or<br />
“<strong>IEA</strong> HIGHLY CONFIDENTIAL” waste is systematically destroyed,<br />
computer material by demagnetizing and paper material by shredding,<br />
under supervision on Agency premises.<br />
2. Security During <strong>the</strong> Gulf Crisis (1990-1991)<br />
Perhaps <strong>the</strong> most critical period for <strong>IEA</strong> security occurred during <strong>the</strong> Gulf<br />
Crisis, between August 1990 and March 1991. This was <strong>the</strong> most recent<br />
occasion for <strong>the</strong> Agency to hold substantial amounts <strong>of</strong> “live”, sensitive data<br />
under its responsibility. Questionnaire A and B sensitive data began to be<br />
received in <strong>the</strong> <strong>IEA</strong> shortly after August 17 when <strong>the</strong> U. S. Secretary <strong>of</strong><br />
Energy issued to U. S. Reporting Companies written antitrust clearances for<br />
submitting Questionnaire A data to <strong>the</strong> Agency. All information received by<br />
<strong>the</strong> Secretariat pursuant to <strong>the</strong> clearances was classified “<strong>IEA</strong> SECRET”<br />
and was handled as such under <strong>the</strong> <strong>IEA</strong> security system. This required an<br />
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immediate review <strong>of</strong> <strong>the</strong> status <strong>of</strong> security in <strong>the</strong> <strong>IEA</strong> and <strong>the</strong> application <strong>of</strong><br />
measures required to ensure that sensitive information arriving in <strong>the</strong><br />
Agency receive <strong>the</strong> appropriate protection. It had <strong>the</strong>n been almost ten<br />
years since a security problem <strong>of</strong> that magnitude had arisen in <strong>the</strong> Agency,<br />
and during such a long period <strong>of</strong> relative “normal times” <strong>the</strong> security<br />
system had been accustomed to <strong>the</strong> long period <strong>of</strong> reduced risk.<br />
<strong>The</strong> first step was to increase <strong>the</strong> Staff’s awareness <strong>of</strong> security<br />
problems and <strong>of</strong> <strong>the</strong> principles and procedures to be applied. <strong>The</strong> Security<br />
Officer immediately started a new round <strong>of</strong> rigorous security briefings for all<br />
<strong>of</strong> <strong>the</strong> Staff and reviewed <strong>the</strong> Agency’s actual practices. <strong>The</strong> Security Officer<br />
made a number <strong>of</strong> recommendations concerning <strong>the</strong> streng<strong>the</strong>ning <strong>of</strong> those<br />
practices. For example, some <strong>of</strong> <strong>the</strong> key rules, such as <strong>the</strong> escort rule, had<br />
been understood to apply to Delegations only when sensitive information was<br />
actually present on <strong>the</strong> <strong>IEA</strong> premises. On <strong>the</strong> recommendation <strong>of</strong> <strong>the</strong><br />
Security Officer, <strong>the</strong> Deputy Executive Director issued an instruction <strong>of</strong><br />
12 September 1990 that “all non-<strong>IEA</strong> personnel, including members <strong>of</strong><br />
OECD Delegations and participants in Governing Board, Standing Group<br />
and o<strong>the</strong>r meetings, must be escorted to and from <strong>of</strong>fices visited within <strong>IEA</strong>”<br />
[DED(90)116]. Inevitably when a crisis suddenly arises some <strong>of</strong> <strong>the</strong> key<br />
Staff will have security clearances granted by <strong>the</strong>ir governments and o<strong>the</strong>rs<br />
will not. In <strong>the</strong> case <strong>of</strong> those individuals whose clearances had not yet been<br />
received, <strong>the</strong> Deputy Executive Director decided that in order for <strong>the</strong><br />
Secretariat to do its work in processing and analyzing <strong>the</strong> Questionnaire A<br />
and Questionnaire B data, all <strong>of</strong> which was sensitive, an interim measure<br />
would have to be adopted. Agency Staff holding clearances would be<br />
employed as much as possible. For Staff who needed access, but whose<br />
clearance had been requested or was being requested from <strong>the</strong> appropriate<br />
national authorities, and had not yet been granted, access would be allowed<br />
as required for <strong>the</strong> Agency to meet its responsibilities, with such Staff to<br />
receive special reminders <strong>of</strong> <strong>the</strong> responsibilities entailed by such access to<br />
sensitive information [DED(90)103, <strong>20</strong> August 1990].<br />
Following <strong>the</strong> end <strong>of</strong> <strong>the</strong> Gulf Crisis military action, <strong>the</strong> arrival <strong>of</strong><br />
sensitive data in <strong>the</strong> Agency terminated upon <strong>the</strong> Executive Director’s<br />
decision “to phase out <strong>the</strong> submission <strong>of</strong> Questionnaires A and B”. Her<br />
intention to do so was noted by <strong>the</strong> Governing Board on 6 March 1991, <strong>the</strong><br />
day on which <strong>the</strong> Board terminated <strong>the</strong> Co-ordinated Energy Emergency<br />
Response Contingency Plan [<strong>IEA</strong>/GB(91)19, Item 3]. Although <strong>the</strong> sensitive<br />
data received in <strong>the</strong> <strong>IEA</strong> would continue to be held by it, <strong>the</strong>re was less need<br />
for <strong>the</strong> strict application <strong>of</strong> <strong>the</strong> emergency security rules. At <strong>the</strong> request <strong>of</strong><br />
two Delegations <strong>the</strong> Agency reverted to its previous practice in normal times<br />
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<strong>of</strong> permitting OECD Delegation members to visit <strong>the</strong> Agency without an<br />
escort, with <strong>the</strong> understanding that if a Delegation member were<br />
accompanied by o<strong>the</strong>rs, an escort would be required; and that when sensitive<br />
information was being employed in <strong>the</strong> Agency or in o<strong>the</strong>r situations, <strong>the</strong><br />
Secretariat may be required to reinstate <strong>the</strong> escort rule for Delegations as<br />
well as for o<strong>the</strong>r persons. Those decisions were announced promptly by<br />
circular to Delegations and <strong>the</strong> Staff [DED(91)172, 27 August 1991].<br />
3. Policy <strong>of</strong> Openness<br />
While <strong>the</strong> <strong>IEA</strong>’s information policies, described above, might be seen as<br />
restrictive, <strong>the</strong>re have been compensatory and liberalizing elements applied.<br />
<strong>The</strong> first <strong>of</strong> <strong>the</strong>se elements is <strong>the</strong> policy <strong>of</strong> <strong>the</strong> Governing Board and <strong>the</strong><br />
Executive Directors to be as forthcoming as possible with <strong>the</strong> press. This<br />
has been true <strong>of</strong> <strong>the</strong> <strong>IEA</strong> from <strong>the</strong> outset. <strong>The</strong> Agency leadership has <strong>of</strong>ten<br />
met with <strong>the</strong> press and disclosed important information in public addresses<br />
and publications. Members <strong>of</strong> <strong>the</strong> Secretariat are encouraged to do <strong>the</strong><br />
same, and <strong>the</strong>y frequently do so with a minimum <strong>of</strong> central control,<br />
sometimes with manuscript review inside <strong>the</strong> <strong>IEA</strong>, and sometimes without.<br />
In addition, recognized academic scholars have been given access to<br />
certain sensitive <strong>IEA</strong> documents (classified CONFIDENTIAL or lower) for<br />
purposes <strong>of</strong> research, analysis and publication. This is done under certain<br />
contractual controls, however, to ensure that <strong>the</strong>re is no inadvertent<br />
disclosure <strong>of</strong> more sensitive information. In four cases, university pr<strong>of</strong>essors<br />
or o<strong>the</strong>r individuals, who were well regarded and highly qualified to deal<br />
with <strong>IEA</strong> type questions, were given access to Governing Board records,<br />
informal notes on meetings and full Agency documentation on subjects<br />
relevant to <strong>the</strong>ir research. This was done in each case with a written<br />
understanding that <strong>the</strong> researchers would not take away from <strong>IEA</strong> premises<br />
any document or paper made available to <strong>the</strong>m in <strong>the</strong> <strong>IEA</strong>, that <strong>the</strong>y would<br />
not cite or publish any <strong>of</strong> <strong>the</strong>m, and that <strong>the</strong>y would provide <strong>the</strong> Secretariat<br />
with a copy <strong>of</strong> <strong>the</strong>ir text for review before <strong>the</strong> manuscript would be<br />
published. In several cases <strong>the</strong> subsequent review led to Secretariat requests<br />
for deletions or modifications, all <strong>of</strong> which were fully respected.<br />
<strong>The</strong> Agency has not established a policy on <strong>the</strong> systematic<br />
derestriction <strong>of</strong> formerly sensitive documents and it has never made blanket<br />
derestriction decisions. Often <strong>the</strong> Governing Board has been asked to<br />
derestrict a key decision at <strong>the</strong> time it is made. That, for example, was <strong>the</strong><br />
case with <strong>the</strong> leading Governing Board actions during <strong>the</strong> 1990-1991 Gulf<br />
Crisis when each decision was released to <strong>the</strong> press on <strong>the</strong> day that it was<br />
331
adopted. <strong>The</strong> derestriction decision is made ei<strong>the</strong>r in <strong>the</strong> decision itself or in<br />
<strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong> meeting, or in some cases it is too obvious to require<br />
explicit reference.<br />
<strong>The</strong> Secretariat has considered that eventually a way might be<br />
found to make <strong>the</strong> historical archives <strong>of</strong> <strong>the</strong> <strong>IEA</strong> available to responsible<br />
scholars on a more regular and systematic basis. <strong>The</strong> selective access <strong>of</strong><br />
scholars raises problems for <strong>the</strong> scholars as well as for <strong>the</strong> Agency. As a<br />
practical matter <strong>the</strong> Agency has to be selective in order to avoid excessive<br />
interference with its work. For <strong>the</strong> scholars <strong>the</strong>mselves selective access<br />
could raise <strong>the</strong> possibility that <strong>the</strong>ir colleagues might not be given access.<br />
So far this has presented only <strong>the</strong>oretical difficulties, but <strong>the</strong> time may come<br />
when historical material which loses its sensitivity could be released more<br />
generally. <strong>The</strong> OECD has embarked on a programme <strong>of</strong> systematic<br />
derestriction (with certain safeguards) after thirty years and it is considering<br />
means <strong>of</strong> organizing archives for systematic scholarly access, at this stage by<br />
arrangement with <strong>the</strong> European University Institute in Florence as<br />
depositary. In due time <strong>the</strong> <strong>IEA</strong> will be considering <strong>the</strong> same questions,<br />
ei<strong>the</strong>r in co-operation with <strong>the</strong> OECD or by o<strong>the</strong>r means. Because <strong>the</strong> <strong>IEA</strong><br />
holds <strong>the</strong> highly sensitive information described above, special<br />
arrangements would have to be considered in order for <strong>the</strong> Agency to<br />
respect its security rules and to ensure that <strong>the</strong> sources <strong>of</strong> sensitive<br />
information conveyed to <strong>the</strong> Agency are adequately protected.<br />
C. Languages<br />
<strong>The</strong> use <strong>of</strong> languages in <strong>the</strong> Agency has been influenced by <strong>the</strong> I.E.P.<br />
Agreement and by Governing Board decisions as well as concerns about <strong>the</strong><br />
efficiency <strong>of</strong> operations. Although <strong>the</strong> English language has been used most<br />
extensively as an <strong>of</strong>ficial and working language throughout <strong>the</strong> history <strong>of</strong><br />
<strong>the</strong> <strong>IEA</strong>, <strong>the</strong> evolution <strong>of</strong> membership in 1991-1992 had a strong influence<br />
on increasing <strong>the</strong> use <strong>of</strong> French and German.<br />
<strong>The</strong> I.E.P. Agreement is silent on <strong>the</strong> question <strong>of</strong> languages, except for<br />
<strong>the</strong> provision in Article 76 that <strong>the</strong> English, French and German texts <strong>of</strong> <strong>the</strong><br />
Agreement are “equally au<strong>the</strong>ntic”. For any question <strong>of</strong> interpretation or<br />
application <strong>of</strong> <strong>the</strong> I.E.P. Agreement, <strong>the</strong> texts in all three languages would<br />
have to be used in appropriate cases. On a number <strong>of</strong> occasions when<br />
interpretation questions have arisen, <strong>the</strong> three languages have been<br />
employed [See, for example, <strong>the</strong> Circular Letter <strong>of</strong> <strong>the</strong> Executive Director to<br />
Heads <strong>of</strong> Delegations, <strong>IEA</strong>/ED/80.198, entitled “Procedures for Making <strong>the</strong><br />
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Finding Pursuant to Articles 19 and 21 <strong>of</strong> <strong>the</strong> I.E.P. Agreement”, 2 June<br />
1980; <strong>IEA</strong>/SEQ(79)50]. This corresponds to <strong>the</strong> common practice under<br />
<strong>the</strong> law <strong>of</strong> treaties [See Article 33 <strong>of</strong> <strong>the</strong> Vienna Convention on <strong>the</strong> Law <strong>of</strong><br />
Treaties <strong>of</strong> 1969].<br />
However, it will be recalled that <strong>the</strong> language in which <strong>the</strong> Agreement<br />
was negotiated at <strong>the</strong> Energy Co-ordinating Group (ECG) in Brussels in<br />
<strong>1974</strong> was almost entirely English, and that <strong>the</strong> ECG itself produced an<br />
English text only. <strong>The</strong> I.E.P. Agreement was signed on 18 November <strong>1974</strong> in<br />
<strong>the</strong> English text only, except for <strong>the</strong> closing attestation which appeared<br />
immediately preceding <strong>the</strong> signatures and for <strong>the</strong> names <strong>of</strong> <strong>the</strong> signatories,<br />
which took <strong>the</strong> form <strong>of</strong> a fragment in <strong>the</strong> three languages. <strong>The</strong> final versions<br />
<strong>of</strong> <strong>the</strong> French and German texts <strong>of</strong> <strong>the</strong> rest <strong>of</strong> <strong>the</strong> Agreement were not <strong>the</strong>n in<br />
existence. <strong>The</strong>y were prepared as translations <strong>of</strong> <strong>the</strong> English original by <strong>the</strong><br />
French and German units <strong>of</strong> <strong>the</strong> OECD translation service, cleared with <strong>the</strong><br />
Delegations and national authorities <strong>of</strong> <strong>the</strong> interested Members, and adopted<br />
<strong>of</strong>ficially by <strong>the</strong> Governing Board on 5-7 February 1975 [<strong>IEA</strong>/GB(75)8,<br />
Item 9, Annex V]. <strong>The</strong>reafter, whenever <strong>the</strong> Agreement has been amended,<br />
this has been done usually first in <strong>the</strong> English version only, and <strong>the</strong> French<br />
and German texts <strong>of</strong> <strong>the</strong> amendments have been adopted by <strong>the</strong> Board later<br />
[See <strong>IEA</strong>/GB(76)24, Item 8 (New Zealand); <strong>IEA</strong>/GB(88)25, Item 5<br />
(Australia, Greece and Portugal); <strong>IEA</strong>/GB(91)19, Item 2 (Finland); and<br />
<strong>IEA</strong>/GB(91)45, Item 2(d) (France)]. In <strong>the</strong> latter two cases texts in all three<br />
language were adopted at <strong>the</strong> same time.<br />
Since <strong>the</strong> founders did not provide in <strong>the</strong> I.E.P. Agreement for <strong>the</strong><br />
languages <strong>of</strong> operation <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong>y left this question to decision by<br />
<strong>the</strong> Governing Board, to be adopted as a procedural and administrative or<br />
management matter, as in many o<strong>the</strong>r organizations. Under Article 50.2<br />
<strong>the</strong> Governing Board, acting by majority, “shall adopt its own rules <strong>of</strong><br />
procedure”; unless o<strong>the</strong>rwise provided, those rules would apply to <strong>the</strong><br />
subordinate bodies <strong>of</strong> <strong>the</strong> Agency as well. <strong>The</strong> rules <strong>of</strong> procedure language<br />
also appears in <strong>the</strong> OECD Council Decision on <strong>the</strong> Establishment <strong>of</strong> <strong>the</strong><br />
Agency, simply as follows: “<strong>The</strong> Governing Board shall adopt its own rules<br />
<strong>of</strong> procedure and voting rules” [Article 4]. <strong>The</strong> <strong>IEA</strong> founders’ intention was<br />
to avoid <strong>the</strong> application <strong>of</strong> <strong>the</strong> OECD’s Rules <strong>of</strong> Procedure (which were<br />
considered inappropriate to <strong>the</strong> Agency and could not be applied<br />
consistently with <strong>the</strong> I.E.P. Agreement to <strong>IEA</strong> operations). OECD Rule <strong>of</strong><br />
Procedure 27 making English and French <strong>the</strong> <strong>of</strong>ficial languages <strong>of</strong> that<br />
Organisation clearly did not apply to <strong>the</strong> <strong>IEA</strong>. <strong>The</strong> I.E.P. Agreement’s<br />
specific provisions on <strong>IEA</strong> rules <strong>of</strong> procedure, as well as <strong>the</strong> broad<br />
management and administrative powers conferred on <strong>the</strong> Board in Article 51,<br />
333
ensured that <strong>the</strong>re could be no contention that OECD rules would apply<br />
unless <strong>the</strong> Board itself would adopt parallel rules, which it has not done.<br />
<strong>The</strong> <strong>IEA</strong> provisions were considered to pre-empt <strong>the</strong> field [On <strong>IEA</strong> Rules <strong>of</strong><br />
Procedure, see Chapter V, Section A-8 above].<br />
<strong>The</strong> intention <strong>of</strong> <strong>the</strong> founders was to continue in <strong>the</strong> <strong>IEA</strong> <strong>the</strong> simplicity<br />
and operational efficiency that had characterized <strong>the</strong> ECG negotiations in<br />
Brussels on <strong>the</strong> I.E.P. Agreement in <strong>the</strong> course <strong>of</strong> <strong>1974</strong>. Most <strong>of</strong> <strong>the</strong> work in<br />
Brussels was carried out in English alone. Nei<strong>the</strong>r <strong>the</strong> French speaking<br />
delegations (France did not participate) nor <strong>the</strong> German speaking delegations<br />
insisted upon working in <strong>the</strong>ir own language in meetings or in documentation.<br />
At <strong>the</strong> Governing Board’s first meeting on 18 November <strong>1974</strong><br />
immediately following <strong>the</strong> signature <strong>of</strong> <strong>the</strong> Agreement, <strong>the</strong> Board decided to<br />
defer <strong>the</strong> preparation <strong>of</strong> formal rules <strong>of</strong> procedure and to “seek to proceed<br />
in a flexible way assuring maximum operational efficiency and simplicity”<br />
[See Section A above; <strong>IEA</strong>/GB(74)9(1st Revision), Preliminary Matters,<br />
paragraph (d)]. More specifically on languages, <strong>the</strong> Board<br />
agreed that for <strong>the</strong> higher bodies <strong>of</strong> <strong>the</strong> Agency German interpretation<br />
would be made available and important documents<br />
would, as appropriate, be circulated in German as well as<br />
French and English [<strong>IEA</strong>/GB(74)9(1st Revision), Item 14(a)].<br />
<strong>The</strong> following month <strong>the</strong> Board again addressed <strong>the</strong> German language<br />
question, this time in <strong>the</strong> context <strong>of</strong> <strong>the</strong> Budget <strong>of</strong> <strong>the</strong> Agency, to consider<br />
<strong>the</strong> costs <strong>of</strong> multiple language usage in <strong>the</strong> <strong>IEA</strong>. On that point <strong>the</strong> Board<br />
agreed on a preliminary basis that <strong>the</strong> German interpretation<br />
and translation and document costs would be met in<br />
accordance with existing OECD arrangements and agreed to<br />
review this question after a few months’ practice to determine<br />
whe<strong>the</strong>r <strong>the</strong>se arrangements are sufficient [<strong>IEA</strong>/GB(74)11(1st<br />
Revision), Item 5(n)].<br />
<strong>The</strong> words “existing OECD arrangements” refer to <strong>the</strong> Council’s Resolution<br />
<strong>of</strong> 3 July 1962 concerning <strong>the</strong> special German and Italian translation and<br />
interpretation services set up within <strong>the</strong> Organisation “at <strong>the</strong> request and at<br />
<strong>the</strong> expense <strong>of</strong> those countries”. <strong>The</strong> costs can be assumed by <strong>the</strong><br />
Organisation if <strong>the</strong> translation or interpretation “is <strong>of</strong> special importance for<br />
<strong>the</strong> success <strong>of</strong> <strong>the</strong> activity in question”. Also, “In practice, a delegate who<br />
wishes to speak in his own language, where it is not one <strong>of</strong> <strong>the</strong> two <strong>of</strong>ficial<br />
334
languages, may do so provided he (or she) bears <strong>the</strong> cost <strong>of</strong> interpretation<br />
into one <strong>of</strong> <strong>the</strong> <strong>of</strong>ficial languages, and provided <strong>the</strong> necessary facilities<br />
(interpretation booths) are available at OECD” [See authorities in <strong>the</strong><br />
OECD Manual for <strong>the</strong> Guidance <strong>of</strong> Chairmen <strong>of</strong> Subsidiary Bodies <strong>of</strong> <strong>the</strong><br />
Organisation, pp. 56-57].<br />
At <strong>the</strong> outset, <strong>the</strong> foregoing authorities provided <strong>the</strong> formal basis for<br />
<strong>IEA</strong> practices concerning languages. <strong>The</strong> ECG concepts <strong>of</strong> flexibility,<br />
operational efficiency and simplicity argued in favor <strong>of</strong> <strong>the</strong> use <strong>of</strong> one<br />
language instead <strong>of</strong> two or three or more, in terms <strong>of</strong> costs, relatively rapid<br />
distribution <strong>of</strong> documents and dedication <strong>of</strong> Staff to substance ra<strong>the</strong>r than<br />
language and o<strong>the</strong>r peripheral activities. <strong>The</strong> image <strong>of</strong> <strong>the</strong> Agency as an<br />
operational ra<strong>the</strong>r than “think tank” type <strong>of</strong> institution and <strong>the</strong> perception<br />
that all government and industry <strong>of</strong>ficials concerned with energy policy could<br />
work effectively in English also played a role in maintaining <strong>the</strong> single<br />
language procedure. Financial pressures in a number <strong>of</strong> governments for zero<br />
real growth would mean that any substantial increase in resources dedicated<br />
to translations and interpretation would have to come from programme<br />
resources and might thus impair <strong>the</strong> substantive work <strong>of</strong> <strong>the</strong> Agency.<br />
It is understandable that under all <strong>of</strong> <strong>the</strong>se circumstances most <strong>IEA</strong><br />
documents over <strong>the</strong> years were produced in English only. <strong>The</strong> major<br />
exception was for Ministerial Level meeting documentation which has<br />
always been distributed in <strong>the</strong> three languages. All o<strong>the</strong>r Board agendas<br />
and documentation were written in English only as a general rule. In <strong>the</strong><br />
1980s <strong>the</strong>re was a request for Agendas to appear in French as well, and that<br />
became a standard practice and continues to <strong>the</strong> present day. Major<br />
institutional documents, like <strong>the</strong> Agreement with Norway, <strong>the</strong> Long-Term<br />
Co-operation Programme, and <strong>the</strong> Charter <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Dispute Settlement<br />
Centre in <strong>the</strong>ir final form, appeared in <strong>the</strong> three languages, but not <strong>the</strong><br />
Emergency Management Manual. However, <strong>the</strong> great bulk <strong>of</strong> Governing<br />
Board, Standing Group and o<strong>the</strong>r <strong>of</strong>ficial documents have appeared in<br />
English only. None <strong>of</strong> <strong>the</strong> <strong>IEA</strong> R & D Implementing Agreements has been<br />
produced in any language o<strong>the</strong>r than English up to <strong>the</strong> date <strong>of</strong> this writing.<br />
Major <strong>IEA</strong> publications do appear in French as well as in English in <strong>the</strong> <strong>IEA</strong><br />
publishing format. Licenses are at times provided for Members or o<strong>the</strong>rs to<br />
publish versions in o<strong>the</strong>r languages as well, at <strong>the</strong> expense and risk <strong>of</strong> <strong>the</strong><br />
publisher. For practical reasons, up to <strong>the</strong> present time, most <strong>IEA</strong><br />
documents and publications have been drafted and first produced in<br />
English. In cases <strong>of</strong> documents prepared immediately prior to a meeting,<br />
<strong>the</strong>re is insufficient time to issue <strong>the</strong> documents in <strong>the</strong> normal way, and<br />
consequently <strong>the</strong>y appear as “Room Documents” in English only.<br />
335
English has also been <strong>the</strong> most widely used language in meetings <strong>of</strong><br />
<strong>IEA</strong> bodies and in <strong>the</strong> Secretariat. French and German interpretation is<br />
provided for all Governing Board meetings. For Ministerial Level meetings<br />
interpretation in Japanese and o<strong>the</strong>r languages is available at <strong>the</strong> expense <strong>of</strong><br />
<strong>the</strong> Delegations requesting those languages. In <strong>the</strong> Standing Groups and<br />
Committees French interpretation is now available and sometimes German<br />
as well, following <strong>the</strong> changes in language policy described below. <strong>The</strong><br />
Working Parties and o<strong>the</strong>r subordinate bodies and informal groups usually<br />
work in English only. In <strong>the</strong> Secretariat <strong>the</strong>re is a growing ability to use<br />
French as a working language.<br />
Budgetary provision has had to be made, <strong>of</strong> course, for translations and<br />
interpretation. <strong>The</strong>se provisions have run in <strong>the</strong> neighborhood <strong>of</strong> two per<br />
cent <strong>of</strong> recent Budgets. For translations prior to 1992 <strong>the</strong> budgeted costs<br />
incurred were for French translations only; German translation costs were<br />
borne entirely by Germany and were not a charge on <strong>IEA</strong> Budgets. <strong>The</strong> 1991<br />
and earlier Budgets referred to making <strong>the</strong> documents available in “both<br />
<strong>of</strong>ficial languages <strong>of</strong> <strong>the</strong> Organisation”, which was a shorthand reference to<br />
French and English, made without <strong>the</strong> intention <strong>of</strong> deciding that both were<br />
<strong>IEA</strong> “<strong>of</strong>ficial languages” in <strong>the</strong> sense <strong>of</strong> <strong>the</strong> OECD Rules <strong>of</strong> Procedure.<br />
Over <strong>the</strong> years <strong>the</strong> French speaking Delegations have expressed<br />
interest in <strong>the</strong> more complete and speedy availability <strong>of</strong> <strong>IEA</strong> documents and<br />
publications in French. This has proven difficult in practice because <strong>the</strong>re is<br />
<strong>of</strong>ten a short period <strong>of</strong> time between <strong>the</strong> completion <strong>of</strong> <strong>the</strong> document in<br />
English and <strong>the</strong> date <strong>of</strong> <strong>the</strong> meeting at which it will be considered. As stated<br />
in <strong>the</strong> 1991 Budget, “In <strong>the</strong>se circumstances, <strong>the</strong> French Translation Service<br />
<strong>of</strong> <strong>the</strong> Organisation finds difficulty in providing for this timing without<br />
impairing its service to <strong>the</strong> Organisation as a whole. <strong>The</strong> Agency makes<br />
extensive use <strong>of</strong> outside translators for publications appearing in both <strong>of</strong>ficial<br />
languages” [<strong>IEA</strong>/GB(90)43, Attachment B, Item 9(b), p. 25]. However, <strong>the</strong><br />
need for last minute detail and analysis in many <strong>IEA</strong> operational documents<br />
continues to make it impossible as a practical matter to have documents<br />
appear in a timely fashion in French and German as well as in English.<br />
<strong>The</strong> most significant changes in <strong>the</strong> Agency’s language expectations and<br />
practices occurred in connection with <strong>the</strong> membership <strong>of</strong> France in 1992.<br />
Early in <strong>the</strong> 1991 discussions with French authorities about <strong>the</strong> possibility <strong>of</strong><br />
French membership, representatives <strong>of</strong> France raised <strong>the</strong> question <strong>of</strong> <strong>the</strong><br />
presence <strong>of</strong> <strong>the</strong> French language in <strong>the</strong> Agency. In that context it had to be<br />
made clear that French was not an “<strong>of</strong>ficial language <strong>of</strong> <strong>the</strong> Agency” and that<br />
<strong>the</strong> Governing Board would have to examine <strong>the</strong> question. It soon appeared<br />
that Germany, a founding Member, was seeking to advance <strong>the</strong> use <strong>of</strong> German<br />
336
in <strong>the</strong> <strong>IEA</strong> and that to some extent <strong>the</strong> questions <strong>of</strong> French and German might<br />
become linked. This did not escape <strong>the</strong> attention <strong>of</strong> <strong>the</strong> Delegates for Italy,<br />
Japan, Portugal and Spain who expressed <strong>of</strong>ficial interest in <strong>the</strong>ir respective<br />
languages being employed in <strong>the</strong> <strong>IEA</strong> too. After extensive negotiations among<br />
<strong>the</strong> interested Delegations and <strong>the</strong> Secretariat, compromise solutions to<br />
accommodate <strong>the</strong> main concerns <strong>of</strong> all sides were arranged.<br />
For <strong>the</strong> French language, <strong>the</strong> Governing Board’s Decision [<strong>IEA</strong>/<br />
GB(91)45, Item 2(e)] recalled <strong>the</strong> letter by which France requested accession<br />
to <strong>the</strong> I.E.P. Agreement and <strong>the</strong> Board’s decision to invite it to accede, and it<br />
decided <strong>the</strong> following:<br />
(i) <strong>the</strong> French language will be fully employed in all <strong>the</strong> bodies<br />
<strong>of</strong> <strong>the</strong> Agency;<br />
(ii) <strong>the</strong> implementation <strong>of</strong> this Decision will be done on a phased<br />
basis and its financial implications will be subject to <strong>the</strong><br />
normal budgetary procedure.<br />
For <strong>the</strong> German language, <strong>the</strong> Board recalled <strong>the</strong> two decisions made<br />
by <strong>the</strong> Board in <strong>1974</strong> on <strong>the</strong> subject <strong>of</strong> languages (quoted above) and<br />
(d) decided that it would be appropriate for <strong>the</strong> costs <strong>of</strong> <strong>the</strong> use <strong>of</strong><br />
German as defined in paragraph (a) above to be progressively<br />
included in <strong>the</strong> annual Budgets <strong>of</strong> <strong>the</strong> Agency, in amounts to be<br />
determined by <strong>the</strong> Governing Board in accordance with <strong>the</strong><br />
normal budgetary procedures, and asked <strong>the</strong> Executive<br />
Director to present for <strong>the</strong> Governing Board’s consideration a<br />
plan that would bring this about without impeding <strong>the</strong><br />
substantive work <strong>of</strong> <strong>the</strong> Agency. [<strong>IEA</strong>/GB(91)45, Item 3].<br />
<strong>The</strong> Delegates for Italy, Japan, Portugal and Spain reserved <strong>the</strong> right to raise at<br />
a future time <strong>the</strong> question <strong>of</strong> <strong>the</strong> use <strong>of</strong> <strong>the</strong>ir respective languages in <strong>the</strong> <strong>IEA</strong>.<br />
In response to <strong>the</strong> Governing Board’s foregoing decisions on <strong>the</strong><br />
French and German languages in 1992, <strong>the</strong> Executive Director proposed an<br />
increase in real resources for translation costs in 1992 <strong>of</strong> FF 1,000,000.<br />
That was adopted as part <strong>of</strong> <strong>the</strong> decision <strong>of</strong> <strong>the</strong> Governing Board on <strong>the</strong><br />
1992 Budget <strong>of</strong> <strong>the</strong> Agency [<strong>IEA</strong>/GB(91)68, Attachment B, Item 9(b),<br />
p. 24]; in <strong>the</strong> 1993 Budget <strong>of</strong> <strong>the</strong> Agency, <strong>the</strong> appropriation for translations<br />
was increased from <strong>the</strong> enlarged base for 1992 to reflect changes in<br />
prices/costs et cetera, but without increase in real resources. That Item was<br />
accompanied by a reference to <strong>the</strong> German and French translation costs for<br />
337
<strong>IEA</strong> documents and publications, and included <strong>the</strong> statement that “Progress<br />
has been achieved and efforts will be streng<strong>the</strong>ned in making translations <strong>of</strong><br />
Agency publications and documents available. However, this goal still<br />
proves difficult to reach in some cases due to <strong>the</strong> pace <strong>of</strong> <strong>the</strong> Agency’s<br />
activities which limits <strong>the</strong> time available between <strong>the</strong> distribution <strong>of</strong><br />
documents and <strong>the</strong>ir consideration at Agency meetings” [<strong>IEA</strong>/GB(92)46,<br />
Attachment B, Item 9(b), p. 24]. Similar statements were made in <strong>the</strong><br />
Budget for <strong>1994</strong>, again without <strong>the</strong>re being increases in real resources for<br />
translations [See <strong>IEA</strong>/GB(93)63, Attachment B, Item 9(b) p. 26]. However,<br />
a greater number <strong>of</strong> <strong>IEA</strong> documents are now produced in French as well as<br />
English. <strong>The</strong> May 1991 Governing Board Conclusions document, which<br />
contains <strong>the</strong> decision on <strong>the</strong> membership <strong>of</strong> France was translated and<br />
circulated in both languages [<strong>IEA</strong>/GB(91)45]. <strong>The</strong> Programme <strong>of</strong> Work<br />
and Budget documents, as well as o<strong>the</strong>rs, also appear increasingly in both<br />
languages.<br />
In some cases, when <strong>the</strong> Secretariat has circulated to Delegations such<br />
lengthy submissions as <strong>the</strong> French country review submissions to <strong>the</strong> Long-<br />
Term Office, <strong>the</strong>re have been complaints that <strong>the</strong> untranslated material can<br />
not be fully utilized by Delegations and <strong>of</strong>ficials in capitals. Under an<br />
earlier practice, French language submissions by Belgium and Luxembourg<br />
were translated into English at <strong>IEA</strong> expense, but that practice was<br />
discontinued for reasons <strong>of</strong> cost and utility in 1990. <strong>The</strong>reafter those<br />
submissions were circulated in French only, and <strong>the</strong> same was true for <strong>the</strong><br />
French Delegation’s first submissions (1991). In 1992 <strong>the</strong> practice <strong>of</strong><br />
circulating submissions was discontinued for cost reasons, but <strong>the</strong><br />
Secretariat retained <strong>the</strong> submissions which may be consulted by Delegations<br />
on request. <strong>The</strong> first emergency response preparation review <strong>of</strong> France was<br />
conducted in 1992, which was in a period <strong>of</strong> transition. <strong>The</strong> French<br />
submission for that review was circulated in both French and English. <strong>The</strong><br />
review itself was conducted in English only, and <strong>the</strong> report <strong>of</strong> <strong>the</strong> review was<br />
circulated in English but not in French.<br />
For <strong>the</strong> translation and production <strong>of</strong> <strong>IEA</strong> publications, in 1992 <strong>the</strong><br />
French and German authorities submitted to <strong>the</strong> Secretariat <strong>the</strong>ir respective<br />
proposals with stated priorities <strong>of</strong> titles, and <strong>the</strong> <strong>IEA</strong> actions have been<br />
worked out case by case on a flexible basis in consultations between <strong>the</strong><br />
Secretariat and <strong>the</strong> two Delegations.<br />
It is expected that <strong>the</strong> use <strong>of</strong> languages in <strong>the</strong> <strong>IEA</strong> will continue to<br />
evolve in <strong>the</strong> future on a pragmatic basis in accordance with programme<br />
and budgetary considerations, with <strong>the</strong> objective <strong>of</strong> making available as<br />
much material as practicable in <strong>the</strong> three languages.<br />
338
D. Documents<br />
<strong>The</strong>re are few <strong>IEA</strong> rules on <strong>the</strong> normal production and distribution <strong>of</strong><br />
documents, except for <strong>the</strong> security rules discussed in Section B and for<br />
language rules discussed in Section C, above. <strong>The</strong> I.E.P. Agreement is all<br />
but silent on this subject, with <strong>the</strong> exception <strong>of</strong> a number <strong>of</strong> provisions for<br />
Standing Groups to report to <strong>the</strong> Governing Board on various topics. Most<br />
<strong>of</strong> those provisions have already fulfilled <strong>the</strong>ir function. <strong>The</strong>y were<br />
employed to mandate urgent work and to set deadlines. For example, <strong>the</strong><br />
provisions <strong>of</strong> Article 42.1 and 43.1 refer to a “report” from <strong>the</strong> Standing<br />
Group on Long Term Co-operation and for <strong>the</strong> Board to decide on proposals<br />
by 1 July 1975, which was <strong>the</strong> procedure that led to <strong>the</strong> adoption <strong>of</strong> <strong>the</strong><br />
Long-Term Co-operation Programme. <strong>The</strong>re are more general reporting<br />
directions specified in <strong>the</strong> Agreement, and <strong>the</strong>y have led to <strong>the</strong> presentation<br />
<strong>of</strong> reporting documents. Article 64.3 calls for <strong>the</strong> submission <strong>of</strong> <strong>the</strong> draft<br />
Budget, including personnel requirements, by 1 October each year. Aside<br />
from <strong>the</strong>se provisions <strong>of</strong> <strong>the</strong> Agreement, <strong>the</strong>re are no fixed rules governing<br />
<strong>the</strong> preparation or submission <strong>of</strong> documents. <strong>The</strong> remaining document<br />
questions are left to <strong>the</strong> rules <strong>of</strong> procedure, financial regulations <strong>of</strong> <strong>the</strong><br />
Agency or to o<strong>the</strong>r procedures. Since systematic bodies <strong>of</strong> rules on those<br />
subjects have not been proposed or developed, <strong>the</strong> <strong>IEA</strong> approach to<br />
documentation has evolved informally through <strong>the</strong> practice <strong>of</strong> Agency<br />
bodies over <strong>the</strong> years.<br />
Documents intended for submission to <strong>IEA</strong> bodies are normally<br />
prepared by <strong>the</strong> Secretariat. However, <strong>the</strong>y may be prepared and submitted<br />
also by <strong>the</strong> Chairman <strong>of</strong> <strong>the</strong> body, by members <strong>of</strong> <strong>the</strong> body or, upon<br />
invitation, by such consultative groups as <strong>the</strong> Industry Advisory Board, <strong>the</strong><br />
Industry Working Party or <strong>the</strong> Coal Industry Advisory Board. Normally<br />
such documents are submitted to <strong>the</strong> Secretariat for reproduction and<br />
distribution.<br />
On document form, content and timing, <strong>the</strong> <strong>IEA</strong> has applied <strong>the</strong><br />
operational principles laid down by <strong>the</strong> Governing Board at its first meeting:<br />
flexibility, maximum operational efficiency and simplicity, outlined above in<br />
Section A <strong>of</strong> this Chapter. In rushed periods Governing Board documents<br />
have at times been produced on <strong>the</strong> morning <strong>of</strong> <strong>the</strong> meeting or in <strong>the</strong> course<br />
<strong>of</strong> <strong>the</strong> meeting (in <strong>the</strong>se cases usually as “Room Documents”), giving<br />
Delegations and colleagues only a minimum notice before <strong>the</strong> document<br />
was introduced and corresponding proposals were presented for decision.<br />
In fact <strong>the</strong>re have been requests from Delegations to allow more time,<br />
particularly by Delegations from <strong>the</strong> countries located <strong>the</strong> far<strong>the</strong>st away<br />
339
from Paris. Before <strong>the</strong> Agency had completed its first year, <strong>the</strong> Governing<br />
Board considered <strong>the</strong> “Timely Distribution <strong>of</strong> Documents” [<strong>IEA</strong>/GB(75)69,<br />
Item 8(b) and:<br />
noted that many Delegations work under such pressures <strong>of</strong> time<br />
that <strong>the</strong> Standing Groups and Secretariat should make still<br />
greater efforts to distribute documents in time to reach capitals<br />
at least 48 hours before <strong>the</strong> documents are to be discussed in<br />
<strong>the</strong> Governing Board.<br />
In 1982 <strong>the</strong> Governing Board noted <strong>the</strong> request by one Delegation for earlier<br />
distribution <strong>of</strong> documents and noted also “<strong>the</strong> need to balance pragmatically<br />
concerns about meeting schedules and timely distribution <strong>of</strong> documents”<br />
[<strong>IEA</strong>/GB(82)92, Item 3(e)]. Since <strong>the</strong>n <strong>the</strong>re has been no Board action on<br />
similar requests made at <strong>the</strong> level <strong>of</strong> <strong>the</strong> Standing Groups or <strong>the</strong> Budget<br />
Committee. By and large <strong>the</strong> Secretariat gives adequate notice and always<br />
seeks to give as much notice as possible. On agendas, for example, new<br />
items are not placed on revised agendas at <strong>the</strong> last moment unless <strong>the</strong>y are<br />
considered to be non-controversial or <strong>of</strong> such overriding importance as to be<br />
unavoidable. When that does occur <strong>the</strong> Delegations are made aware <strong>of</strong> <strong>the</strong><br />
problem and have confidence in <strong>the</strong> Secretariat’s judgement that <strong>the</strong> best will<br />
have been made <strong>of</strong> a difficult situation.<br />
Normally, however, it is possible to provide a more extensive advance<br />
view. Draft agendas are prepared a month or so in advance <strong>of</strong> <strong>the</strong> meeting<br />
and are sometimes available on request (with a caveat as to <strong>the</strong>ir<br />
preliminary character). O<strong>the</strong>r documents as well are distributed as much as<br />
possible in advance, unless it is clear that new elements are to be developed<br />
or that <strong>the</strong> situation treated in <strong>the</strong> document is likely to change materially.<br />
In those cases it would be confusing and cause loss <strong>of</strong> Delegates’ time to<br />
have an early version <strong>of</strong> a document distributed prematurely. By 1991 <strong>the</strong><br />
application <strong>of</strong> <strong>the</strong> OECD’s On-Line Information Service (OLIS) and <strong>the</strong><br />
availability <strong>of</strong> o<strong>the</strong>r electronic transmission systems had removed most <strong>of</strong><br />
<strong>the</strong> burden that might o<strong>the</strong>rwise have fallen on Delegations when<br />
documents could not be distributed until shortly before a meeting. When<br />
late distribution <strong>of</strong> meeting or o<strong>the</strong>r documents cannot be avoided, in<br />
appropriate cases <strong>the</strong> Secretariat makes a rapid special distribution directly<br />
to Energy Advisers in Delegations.<br />
Although <strong>the</strong> OECD has adopted rules governing such questions as<br />
<strong>the</strong> due dates for agendas and documents (whenever possible 15 days in<br />
advance in accordance with Rule 12 <strong>of</strong> <strong>the</strong> OECD Rules <strong>of</strong> Procedure; see<br />
340
OECD Manual for <strong>the</strong> Guidance <strong>of</strong> Chairmen <strong>of</strong> Subsidiary Bodies <strong>of</strong> <strong>the</strong><br />
Organisation, pp. 49, 50), <strong>the</strong> <strong>IEA</strong> has no such rule and is more flexible<br />
both on agendas and o<strong>the</strong>r meeting documents. Sometimes effective<br />
deadlines are set when an <strong>IEA</strong> body fixes a day for distributing a document<br />
in advance <strong>of</strong> a later meeting, or when it agrees that a certain question<br />
would be taken up on a fixed date on <strong>the</strong> basis <strong>of</strong> a paper prepared by <strong>the</strong><br />
Secretariat, but those measures are tailored to <strong>the</strong> particular situation and<br />
are not at all arbitrary.<br />
From <strong>the</strong> outset it was clear that <strong>the</strong> <strong>IEA</strong> preferred to work under<br />
conditions which would produce <strong>the</strong> most up-to-date information and<br />
analyses, even at <strong>the</strong> cost <strong>of</strong> not having <strong>the</strong> documentation in Delegates’<br />
hands as far in advance as might be provided in o<strong>the</strong>r organizations. <strong>The</strong><br />
Secretariat seeks to alleviate <strong>the</strong>se problems by distributing “Advance<br />
Copies” to Delegations and within <strong>the</strong> Secretariat at <strong>the</strong> same time <strong>the</strong><br />
documents are transmitted to <strong>the</strong> OECD distribution system. In special<br />
cases when a Delegation has a particular interest or time problem <strong>the</strong><br />
Secretariat has used <strong>the</strong> fax system to accelerate <strong>the</strong> process fur<strong>the</strong>r.<br />
<strong>The</strong> OECD provides <strong>the</strong> <strong>IEA</strong> with a great deal <strong>of</strong> assistance in <strong>the</strong><br />
reproduction and distribution <strong>of</strong> documents. <strong>The</strong> <strong>IEA</strong> employs <strong>the</strong> OECD<br />
formats, document code systems and o<strong>the</strong>r documentation practices. OECD<br />
co-operation in this field is efficient and effective, enabling <strong>the</strong> <strong>IEA</strong> to avoid<br />
duplication <strong>of</strong> those functions within <strong>the</strong> Agency.<br />
A list <strong>of</strong> <strong>the</strong> follow-on document codes now in use by <strong>the</strong> <strong>IEA</strong> is set<br />
forth below, toge<strong>the</strong>r with an indication <strong>of</strong> <strong>the</strong> principal use <strong>of</strong> each code.<br />
Once a document is issued, follow-on documents on <strong>the</strong> same subject may<br />
employ one or more <strong>of</strong> <strong>the</strong>se codes affixed alongside <strong>the</strong> initial document<br />
code:<br />
■<br />
■<br />
■<br />
“CORR”: means that <strong>the</strong> document bearing this indication is a<br />
Corrigendum which modifies <strong>the</strong> text in <strong>the</strong> underlying document;<br />
<strong>the</strong>re might be a succession <strong>of</strong> those codes, like “CORR1”, “CORR2”<br />
etc; except as so modified, <strong>the</strong> underlying document remains<br />
operative.<br />
“REV”: means <strong>the</strong> document bearing this indication is a revision<br />
intended to replace entirely <strong>the</strong> underlying document; this may also<br />
appear in a series: “REV1”, “REV2” etc.<br />
“ADD”: means that <strong>the</strong> document bearing this indication adds<br />
material to <strong>the</strong> underlying document; this may also appear in a series:<br />
“ADD1”, “ADD2” etc; in <strong>the</strong>se cases <strong>the</strong> underlying document<br />
remains operative o<strong>the</strong>rwise.<br />
341
Archive documents in <strong>the</strong> <strong>IEA</strong> are held at various locations within <strong>the</strong><br />
Agency’s premises. <strong>The</strong> Agency holds a partial collection <strong>of</strong> <strong>the</strong> Energy Coordinating<br />
Group (ECG) documents which give <strong>the</strong> background on <strong>the</strong><br />
I.E.P. Agreement negotiated in Brussels in <strong>1974</strong>. <strong>The</strong>se are derived from<br />
<strong>the</strong> fragmentary documents collected by <strong>the</strong> Secretariat members who<br />
participated in <strong>the</strong> ECG (Messrs Lantzke, Hopkins, Scott, Sunami and<br />
Huggins) and o<strong>the</strong>rs, and include <strong>the</strong> entire collection formerly held by <strong>the</strong><br />
Treaties Section <strong>of</strong> <strong>the</strong> Belgian Foreign Ministry which hosted <strong>the</strong> ECG and<br />
those documents preserved by o<strong>the</strong>r Belgian Government authorities. At <strong>the</strong><br />
request <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Legal Counsel, <strong>the</strong> Belgian Government’s holdings were<br />
delivered during <strong>the</strong> 1980s to <strong>the</strong> <strong>IEA</strong>, where <strong>the</strong>y are held in <strong>the</strong> <strong>IEA</strong> Office<br />
<strong>of</strong> <strong>the</strong> Legal Counsel. <strong>The</strong>y are never<strong>the</strong>less quite incomplete.<br />
Governing Board records are held in separate files, one for each<br />
meeting. <strong>The</strong>se records contain copies <strong>of</strong> <strong>the</strong> meeting documents, <strong>the</strong><br />
handwritten notes <strong>of</strong> <strong>the</strong> Legal Counsel who records <strong>the</strong> Conclusions <strong>of</strong> <strong>the</strong><br />
meetings, and related papers; <strong>the</strong>y are held in <strong>the</strong> Office <strong>of</strong> <strong>the</strong> Legal<br />
Counsel. A supply <strong>of</strong> copies <strong>of</strong> most Governing Board documents is held in<br />
<strong>the</strong> <strong>IEA</strong> Administration Unit. Documentation for each <strong>of</strong> <strong>the</strong> Standing<br />
Groups and <strong>the</strong> Committees is held in <strong>the</strong> Office <strong>of</strong> <strong>the</strong> Secretariat which<br />
provides support for <strong>the</strong> particular body. <strong>The</strong> <strong>IEA</strong> archive system and <strong>the</strong><br />
<strong>IEA</strong> Library also maintain extensive collections <strong>of</strong> documents on <strong>the</strong> <strong>IEA</strong><br />
premises. It is expected that <strong>the</strong> major part <strong>of</strong> significant <strong>IEA</strong> documents<br />
will eventually be placed on CD ROM diskettes and be made available to<br />
authorized persons in that format.<br />
References to <strong>IEA</strong> document rules and practices appear throughout<br />
this work. Some <strong>of</strong> <strong>the</strong> particular contexts in which material on this subject<br />
may be found include: Chapter V, Section A-19 on Governing Board<br />
Conclusions and Minutes; Chapter VIII, Section B on Security and Section C<br />
on Languages; Appendix III which reproduces <strong>the</strong> I.E.P. Agreement;<br />
Appendix IV which reproduces <strong>the</strong> OECD Council Decision on <strong>the</strong><br />
Establishment <strong>of</strong> <strong>the</strong> Agency; and Appendix VI which describes <strong>the</strong><br />
Highlights <strong>of</strong> Principal <strong>IEA</strong> Events <strong>1974</strong>-1993 and cites each <strong>of</strong> <strong>the</strong> <strong>IEA</strong>’s<br />
Annual Reports on which that Appendix is based. <strong>Vol</strong>ume III <strong>of</strong> this <strong>History</strong><br />
will contain a collection <strong>of</strong> principal <strong>IEA</strong> documents.<br />
End <strong>of</strong> <strong>Vol</strong>ume I.<br />
342
APPENDIX I<br />
Membership<br />
1 January <strong>1994</strong><br />
Participating Signature or Date <strong>of</strong> Deposit Date <strong>of</strong> Entry<br />
Country Accession <strong>of</strong> Consent into Force<br />
to be Bound<br />
Australia<br />
Austria<br />
Belgium<br />
Canada<br />
Denmark<br />
Finland<br />
France<br />
Germany<br />
Greece<br />
Ireland<br />
Italy<br />
Japan<br />
Luxembourg<br />
<strong>The</strong> Ne<strong>the</strong>rlands<br />
New Zealand<br />
Portugal<br />
Spain<br />
Sweden<br />
Switzerland<br />
Turkey<br />
United Kingdom<br />
United States<br />
17 May 1979<br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
22 Dec. 1991<br />
28 July 1992<br />
18 Nov. <strong>1974</strong><br />
25 Sep. 1976*<br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
21 Mar. 1975*<br />
09 May 1980*<br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
18 Nov. <strong>1974</strong><br />
17 May 1979<br />
30 June 1976<br />
29 July 1976<br />
17 Dec. 1975<br />
19 June 1975<br />
22 Dec. 1991<br />
28 July 1992<br />
<strong>20</strong> Oct. 1975<br />
15 July 1977<br />
28 July 1975<br />
03 Feb. 1978<br />
30 Apr. 1975<br />
24 Apr. 1975<br />
30 Mar. 1976<br />
29 Dec. 1976<br />
29 June 1981<br />
17 Nov. 1975<br />
18 Dec. 1975<br />
08 Dec. 1975<br />
24 Apr. 1981<br />
30 Oct. 1975<br />
09 Jan. 1976<br />
27 May 1979<br />
10 July 1976<br />
08 Aug. 1976<br />
19 Jan. 1976<br />
19 Jan. 1976<br />
01 Jan. 1992<br />
07 Aug. 1992<br />
19 Jan. 1976<br />
25 July 1977<br />
19 Jan. 1976<br />
13 Feb. 1978<br />
19 Jan. 1976<br />
19 Jan. 1976<br />
09 Apr. 1976<br />
08 Jan. 1977<br />
09 Jul. 1981<br />
19 Jan. 1976<br />
19 Jan. 1976<br />
19 Jan. 1976<br />
04 May 1981<br />
19 Jan. 1976<br />
19 Jan. 1976<br />
* Provisional accession.<br />
Norway participates in <strong>the</strong> Agency under a special Agreement.<br />
<strong>The</strong> European Communities (European Union) co-operate with <strong>the</strong> <strong>IEA</strong> on<br />
<strong>the</strong> basis <strong>of</strong> Protocol No. 1 to <strong>the</strong> OECD Convention which provides for <strong>the</strong><br />
Commission to “take part in <strong>the</strong> work” <strong>of</strong> <strong>the</strong> Organisation.<br />
343
344
APPENDIX II<br />
Officers <strong>of</strong> <strong>the</strong> Governing Board<br />
at Ministerial and Official Level,<br />
Standing Groups and Committees<br />
1 January <strong>1994</strong><br />
Name Country Meeting Dates <strong>of</strong> Service<br />
GOVERNING BOARD AT MINISTERIAL LEVEL<br />
Chairmen<br />
Mr. Günter Rexrodt Germany 131st Meeting 4 June 1993<br />
Mr. Adolf Ogi Switzerland 1<strong>20</strong>th Meeting 3 June 1991<br />
Mr. José Claudio Aranzadi Spain 104th Meeting 30 May 1989<br />
Mr. Marcel Masse Canada 95th Meeting 11 May 1987<br />
Mr. G. M. V. van Aardenne <strong>The</strong> 86th Meeting 9 July 1985<br />
Ne<strong>the</strong>rlands<br />
Mr. W. F. Birch New Zealand 75th Meeting 8 May 1983<br />
Mr. Nigel Lawson United 69th BIS 24 May 1982<br />
Kingdom Meeting<br />
Mr. J. L. Carrick Australia 65th Meeting 15 June 1981<br />
Mr. Charles W. Duncan United States 61st Meeting 8-9 December 1980<br />
Mr. Otto Lambsdorff Germany 55th Meeting 21-22 May 1980<br />
Mr. Otto Lambsdorff Germany 48th Meeting 10 December 1979<br />
Mr. David Howell United 42nd Meeting 21-22 May 1979<br />
Kingdom<br />
Mr. Alastair Gillespie Canada 32nd Meeting 5-6 October 1977<br />
Mr. Renaat van Elslande Belgium 9th Meeting 27 May 1975<br />
Vice-Chairmen<br />
Mr. K. E. Newman Australia 42nd Meeting 21-22 May 1979<br />
Mr. Stravos Dimas Greece 42nd Meeting 21-22 May 1979<br />
345
Name Country Dates <strong>of</strong> Service<br />
GOVERNING BOARD AT OFFICIAL LEVEL<br />
Chairmen<br />
Mr. C. W. M. Dessens <strong>The</strong> Ne<strong>the</strong>rlands Dec. 1992 - present<br />
Mr. R. Priddle United Kingdom Oct. 1991 - Dec. 1992<br />
Mr. G. Chipperfield United Kingdom Mar. 1991 - Oct. 1991<br />
Mr. U. Engelmann Germany Jan. 1987 - Mar. 1991<br />
Mr. de Montigny Marchand Canada Oct. 1985 - Dec. 1986<br />
Mr. P. Tellier Canada Jul. 1985 - Oct. 1985<br />
Mr. A. J. Woods Australia May 1983 - Jul. 1985<br />
Mr. H. Miyazaki Japan Oct. 1980 - May 1983<br />
Mr. N.E.N. Ersbøll Denmark Jan. 1979 - Oct. 1980<br />
Mr. D.K. Rohwedder Germany Jan. 1977 - Dec. 1978<br />
Mr. S. Davignon Belgium Nov. <strong>1974</strong> - Jan. 1977<br />
Vice-Chairmen<br />
Ms. S. Fallows Tierney United States Oct. 1993 - present<br />
Mr. Y. Sato Japan Dec. 1992 - present<br />
Mr. A. Wal<strong>the</strong>r Norway Jan. 1992 - present<br />
Mr. H. Fujii Japan Oct. 1989 - Dec. 1992<br />
Mr. J. Easton United States Oct. 1989 - Dec. 1992<br />
Mr. H. Owada Japan Apr. 1988 - Oct. 1989<br />
Mr. D. Waller United States Jan. 1987 - Oct. 1989<br />
Mr. H. Fukada Japan Apr. 1986 - Déc. 1987<br />
Mr. G. Jacoangeli Italy Mar. 1985 - Dec. 1986<br />
Mr. R. Annerberg Sweden Mar. 1985 - Dec. 1991<br />
Mr. W. J. Jenkins Canada Oct. 1983 - Apr. 1986<br />
Mr. A. A. Fatouros Greece Oct. 1983 - Mar. 1985<br />
Mr. U. Dahlsten Sweden Oct. 1983 - Mar. 1985<br />
Mr. P. Subasi Turkey Jan. 1982 - Oct. 1983<br />
Mr. U. Engelmann Germany Feb. 1981 - Dec. 1986<br />
Mr. R. Hormats United States Feb. 1981 - Dec. 1982<br />
Mr. M. Aytür Turkey Feb. 1981 - Dec. 1981<br />
Mr. H. Miyazaki Japan Feb. 1980 - Oct. 1980<br />
Mr. P. Hunt Canada Feb. 1980 - Feb. 1981<br />
Mr. P. Jankowitsch Austria Mar. 1979 - Dec. 1982<br />
346
Name Country Dates <strong>of</strong> Service<br />
Mr. T. Chavarri Spain Mar. 1979 - Feb. 1981<br />
Mr. B. von Tscharner Switzerland Jan. 1978 - Feb. 1980<br />
Mr. F. J. Vallaure Spain Jan. 1978 - Dec. 1978<br />
Mr. N. E. N. Ersbøll Denmark Jan. 1977 - Dec. 1978<br />
Mr. C. Bobleter Austria Jan. 1976 - Jan. 1978<br />
Mr. T. Hirahara Japan Jan. 1976 - Feb. 1980<br />
Mr. P. M. Towe Canada Nov. <strong>1974</strong> - Jan. 1978<br />
Mr. D. K. Rohwedder Germany Nov. <strong>1974</strong> - Jan. 1977<br />
Mr. Thuysbaert Belgium Nov. <strong>1974</strong> - Dec. 1976<br />
Mr. Yoshino Japan Nov. <strong>1974</strong> - Dec. 1975<br />
STANDING GROUP ON EMERGENCY QUESTIONS (SEQ)<br />
Chairmen<br />
Mr. H. E. Leyser Germany Jan. 1992 - present<br />
Mr. E. Röhling Germany Jan. 1991 - Dec. 1991<br />
Mr. W. Pfletschinger Germany Jan. 1990 - Jan. 1991<br />
Mr. J. Geerlings <strong>The</strong> Ne<strong>the</strong>rlands Jan. 1983 - Dec. 1989<br />
Mr. D. Jones United Kingdom Jan. 1978 - Dec. 1982<br />
Mr. P. le Cheminant United Kingdom Jul. 1976 - Jan. 1978<br />
Mr. A. A. T. van Rhijn <strong>The</strong> Ne<strong>the</strong>rlands Nov. <strong>1974</strong> - Jul. 1976<br />
Vice-Chairmen<br />
Mr. F. Nielsen United States Mar. 1989 - present<br />
Mr. P. Oberson Switzerland Sep. 1987 - Mar. 1989<br />
Mr. G. N. Currie Canada Jan. 1984 - Sep. 1987<br />
Mr. B. Hemborg Sweden Jan. 1978 - Dec. 1983<br />
Mr. A. A. T. van Rhijn <strong>The</strong> Ne<strong>the</strong>rlands Jul. 1976 - Feb. 1981<br />
STANDING GROUP ON LONG-TERM CO-OPERATION (SLT)<br />
Chairmen<br />
Mr. R. E. Hecklinger United States Oct. 1993 - present<br />
Mr. W. Ramsay United States Oct. 1989 - Oct. 1993<br />
347
Name Country Dates <strong>of</strong> Service<br />
Mr. J. Ferriter United States Sep. 1987 - Jun. 1989<br />
Mr. A. Larson United States Sep. 1986 - Sep. 1987<br />
Mr. A. Wendt United States Apr. 1983 - Sep. 1986<br />
Mr. J. Ferriter United States Jan. 1982 - Apr. 1983<br />
Mr. E. Morse United States Jul. 1980 - Dec. 1981<br />
Mr. P. Borre United States Jul. 1979 - Jul. 1980<br />
Mr. G. Rosen United States Jan. 1978 - Jul. 1979<br />
Mr. L. Raicht United States Jul. 1976 - Dec. 1977<br />
Mr. S. W. Bosworth United States Nov. <strong>1974</strong> - Jul. 1976<br />
Vice-Chairmen<br />
Mr. H. Saeki Japan Oct. 1993 - present<br />
Mr. P. Gerresch Belgium Mar. 1989 - present<br />
Mr. I. Kashima Japan Oct. 1991 - Oct. 1993<br />
Mr. R. Hayashi Japan Aug. 1990 - Oct. 1991<br />
Mr. M. Sase Japan Sep. 1988 - Aug. 1990<br />
Mr. Y. Ichiryu Japan Sep. 1987 - Mar. 1989<br />
Mr. H. D. Kuschel Germany Apr. 1986 - Mar. 1989<br />
Mr. Y. Hayashi Japan Sep. 1986 - Sep. 1987<br />
Mr. K. Seiki Japan Oct. 1984 - Sep. 1986<br />
Mr. T. Yoneyama Japan Jan. 1983 - Apr. 1983<br />
Mr. B. D. Nielsen Denmark Jan. 1983 - Apr. 1986<br />
Mr. T. Okabe Japan Apr. 1983 - Oct. 1984<br />
Mr. R. Anraku Japan Feb. 1981 - Dec. 1982<br />
Mr. J. Geerlings <strong>The</strong> Ne<strong>the</strong>rlands Jul. 1979 - Dec. 1982<br />
Mr. J. Sawada Japan Oct. 1979 - Feb. 1981<br />
Mr. P. Borre United States Apr. 1977 - Jul. 1979<br />
Mr. H. Kinoshita Japan Apr. 1977 - Dec. 1978<br />
STANDING GROUP ON THE OIL MARKET (SOM)<br />
Chairmen<br />
Mr. M. Cleland Canada Mar. 1993 - present<br />
Mr. C. W. M. Dessens <strong>The</strong> Ne<strong>the</strong>rlands Oct. 1989 - Mar. 1993<br />
348
Name Country Dates <strong>of</strong> Service<br />
Mr. K. Eichenberger Switzerland Jun. 1985 - Oct. 1989<br />
Mr. G. Vatten Norway Jul. 1984 - Jun. 1985<br />
Mr. D. N. Campbell Canada Jan. 1982 - Jul. 1984<br />
Mr. E. Becker Germany Oct. 1976 - Dec. 1981<br />
Mr. W. H. Hopper Canada Nov. <strong>1974</strong> - Oct. 1976<br />
Vice-Chairmen<br />
Mr. J. Brodman United States Jan. 1983 - present<br />
Mr. S. Endo Japan Mar. 1993 - present<br />
Mr. Y. Kusumoto Japan Jan. 1992 - Mar. 1993<br />
Mr. T. Takahashi Japan Oct. 1989 - Dec. 1991<br />
Mr. H. Mitamura Japan Sep. 1987 - Oct. 1989<br />
Mr. I. Fujisaki Japan Sep. 1986 - Sep.1987<br />
Mr. K. Togo Japan Jul. 1984 - Sep. 1986<br />
Mr. K. Eichenberger Switzerland Jul. 1984 - Jun. 1985<br />
Mr. T. Murayama Japan Dec. 1983 - Jul. 1984<br />
Mr. I. Watanabe Japan Feb. 1980 - Dec. 1983<br />
Mr. G. Caruso United States Jan. 1982 - Dec. 1982<br />
Mr. D. Oliver United States Feb. 1980 - Dec. 1981<br />
Mrs. D. E. F. Carter United Kingdom Jul. 1976 - Feb. 1980<br />
Mr. R. Priddle Canada Jul. 1976 - Feb. 1980<br />
STANDING GROUP ON RELATIONS WITH PRODUCER AND OTHER<br />
CONSUMER COUNTRIES (SPC)<br />
Chairmen<br />
Mr. R. Annerberg Sweden Mar. 1989 - Mar. 1991<br />
Mr. J. Dahl Norway Apr. 1986 - Mar. 1989<br />
Mr. H. C. Posthumus Meyjes <strong>The</strong> Ne<strong>the</strong>rlands Oct. 1980 - Apr. 1986<br />
Miss G. G. Brown United Kingdom Apr. 1978 - Oct. 1980<br />
Mr. R. A. Burrows United Kingdom Mar. 1976 - Apr. 1978<br />
Mr. J. Wilton United Kingdom Nov. <strong>1974</strong> - Mar. 1976<br />
349
Name Country Dates <strong>of</strong> Service<br />
COMMITTEE ON ENERGY RESEARCH AND TECHNOLOGY (CERT)<br />
(formerly COMMITTEE ON ENERGY RESEARCH AND DEVELOPMENT (CRD)<br />
and SLT SUB-GROUP ON RESEARCH AND DEVELOPMENT)<br />
Chairmen<br />
Mr. H. Koch Denmark Mar. 1991 - present<br />
Mr. K. Yokobori Japan Jan. 1990 - Mar. 1991<br />
Mr. P. Dyne Canada Feb. 1988 - Dec. 1989<br />
Mr. J. Decker United States Jan. 1986 - Feb. 1988<br />
Mr. D. Kerr United States Mar. 1979 - Dec. 1985<br />
Mr. R. Thorne United States Sep. 1978 - Mar. 1979<br />
Mr. W. Schmidt-Küster Germany Feb. 1975 - Sep. 1978<br />
Vice-Chairmen<br />
Mr. T. Murayama Japan May 1993 - present<br />
Mr. R. Bradley United States Apr. 1993 - present<br />
Mr. K. Shimada Japan Jan. 1992 - May 1993<br />
Mr. S. Oshima Japan Mar. 1991 - Dec. 1991<br />
Mr. H. Jaffe United States Jan. 1990 - Apr. 1993<br />
Mr. S. Oshima Japan Mar. 1989 - Dec. 1989<br />
Mr. S. R. Jacobsen Denmark Mar. 1989 - Mar. 1991<br />
COMMITTEE ON BUDGET AND EXPENDITURE (BC)<br />
Chairmen<br />
Mr. A. H. F. van Aggelen <strong>The</strong> Ne<strong>the</strong>rlands Oct. 1992 - present<br />
Mr. B. Jones Australia Oct. 1991 - Oct. 1992<br />
Mr. S. De Loecker Belgium Aug. 1990 - Oct. 1991<br />
Mr. G. Zubler Switzerland Mar. 1989 - Aug. 1990<br />
Mr. R. McLeod New Zealand 1985 - 1987<br />
Mr. P. Walker Canada 1982 - 1985<br />
Mr. R. Layland Australia 1980 - 1981<br />
Mr. J. M. Boulgaris Switzerland 1978 - 1980<br />
Mr. F. van Haren <strong>The</strong> Ne<strong>the</strong>rlands 1976 - 1978<br />
Mr. S. Woollcombe Canada 1975 - 1976<br />
350
Name Country Dates <strong>of</strong> Service<br />
COMMITTEE ON NON-MEMBER COUNTRIES (NMC)<br />
(formerly AD HOC GROUP ON INTERNATIONAL ENERGY RELATIONS,<br />
(AHGIER))<br />
Chairmen<br />
Mr. A. Wal<strong>the</strong>r Norway May 1992 - present<br />
Mr. R. Annerberg Sweden Mar. 1989 - May 1992<br />
Mr. J. Dahl Norway Apr. 1986 - Mar. 1989<br />
Mr. H. C. Posthumus Meyjes <strong>The</strong> Ne<strong>the</strong>rlands Oct. 1980 - Apr. 1986<br />
Miss G. G. Brown United Kingdom Apr. 1978 - Oct. 1980<br />
Mr. R. A. Burrows United Kingdom Jun. 1977 - Apr. 1978<br />
Vice-Chairmen<br />
Mr. M. Atkinson United Kingdom Mar. 1993 - present<br />
351
APPENDIX III<br />
Agreement on an<br />
International Energy Program<br />
(As amended to 7th August 1992)<br />
Table <strong>of</strong> Contents<br />
PREAMBLE ............................................................................................ 359<br />
Article 1 ..................................................................................... 360<br />
Chapter I<br />
EMERGENCY SELF-SUFFICIENCY .......................................................... 360<br />
Article 2 ..................................................................................... 360<br />
Article 3 ..................................................................................... 361<br />
Article 4 ..................................................................................... 361<br />
Chapter II<br />
DEMAND RESTRAINT ............................................................................ 362<br />
Article 5 ..................................................................................... 362<br />
Chapter III<br />
ALLOCATION ......................................................................................... 362<br />
Article 6 ..................................................................................... 362<br />
Article 7 ..................................................................................... 363<br />
Article 8 ..................................................................................... 364<br />
353
Article 9 ..................................................................................... 365<br />
Article 10 ................................................................................... 366<br />
Article 11 ................................................................................... 366<br />
Chapter IV<br />
ACTIVATION .......................................................................................... 366<br />
Activation:<br />
Article 12 ................................................................................... 366<br />
Article 13 ................................................................................... 367<br />
Article 14 ................................................................................... 367<br />
Article 15 ................................................................................... 367<br />
Article 16 ................................................................................... 367<br />
Article 17 ................................................................................... 368<br />
Article 18 ................................................................................... 368<br />
Article 19 ................................................................................... 368<br />
Article <strong>20</strong> ................................................................................... 369<br />
Article 21 ................................................................................... 370<br />
Article 22 ................................................................................... 371<br />
Deactivation:<br />
Article 23 ................................................................................... 371<br />
Article 24 ................................................................................... 372<br />
Chapter V<br />
INFORMATION SYSTEM ON THE INTERNATIONAL OIL MARKET ........... 372<br />
Article 25 ................................................................................... 372<br />
Article 26 ................................................................................... 372<br />
General Section:<br />
Article 27 ................................................................................... 373<br />
Article 28 ................................................................................... 374<br />
Article 29 ................................................................................... 374<br />
Article 30 ................................................................................... 374<br />
Article 31 ................................................................................... 375<br />
Special Section:<br />
Article 32 ................................................................................... 375<br />
Article 33 ................................................................................... 376<br />
354
Article 34 ................................................................................... 376<br />
Article 35 ................................................................................... 377<br />
Article 36 ................................................................................... 377<br />
Chapter VI<br />
FRAMWORK FOR CONSULTATION WITH OIL COMPANIES ...................... 377<br />
Article 37 ................................................................................... 377<br />
Article 38 ................................................................................... 378<br />
Article 39 ................................................................................... 378<br />
Article 40 ................................................................................... 378<br />
Chapter VII<br />
LONG TERM CO-OPERATION ON ENERGY ............................................. 379<br />
Article 41 ................................................................................... 379<br />
Article 42 ................................................................................... 379<br />
Article 43 ................................................................................... 381<br />
Chapter VIII<br />
RELATIONS WITH PRODUCER COUNTRIES AND WITH OTHER<br />
CONSUMER COUNTRIES ........................................................................ 381<br />
Article 44 ................................................................................... 381<br />
Article 45 ................................................................................... 381<br />
Article 46 ................................................................................... 382<br />
Article 47 ................................................................................... 382<br />
Article 48 ................................................................................... 382<br />
Chapter IX<br />
INSTITUTIONAL AND GENERAL PROVISIONS ........................................ 383<br />
Article 49 ................................................................................... 383<br />
Governing Board:<br />
Article 50 ................................................................................... 383<br />
Article 51 ................................................................................... 384<br />
Article 52 ................................................................................... 384<br />
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Management Committee:<br />
Article 53 ................................................................................... 384<br />
Standing Groups:<br />
Article 54 ................................................................................... 385<br />
Article 55 ................................................................................... 385<br />
Article 56 ................................................................................... 385<br />
Article 57 ................................................................................... 386<br />
Article 58 ................................................................................... 386<br />
Secretariat:<br />
Article 59 ................................................................................... 386<br />
Article 60 ................................................................................... 387<br />
Voting:<br />
Article 61 ................................................................................... 387<br />
Article 62 ................................................................................... 388<br />
Relations with O<strong>the</strong>r Entities:<br />
Article 63 ................................................................................... 390<br />
Financial Arrangements:<br />
Article 64 ................................................................................... 390<br />
Special Activities:<br />
Article 65 ................................................................................... 391<br />
Implementation <strong>of</strong> <strong>the</strong> Agreement:<br />
Article 66 ................................................................................... 391<br />
Chapter X<br />
FINAL PROVISIONS ............................................................................... 392<br />
Article 67 ................................................................................... 392<br />
Article 68 ................................................................................... 392<br />
Article 69 ................................................................................... 393<br />
Article 70 ................................................................................... 393<br />
Article 71 ................................................................................... 393<br />
Article 72 ................................................................................... 394<br />
Article 73 ................................................................................... 394<br />
Article 74 ................................................................................... 394<br />
Article 75 ................................................................................... 394<br />
Article 76 ................................................................................... 394<br />
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ANNEX<br />
EMERGENCY RESERVES......................................................................... 399<br />
Article 1 ..................................................................................... 399<br />
Article 2 ..................................................................................... 401<br />
Article 3 ..................................................................................... 402<br />
Article 4 ..................................................................................... 402<br />
Article 5 ..................................................................................... 402<br />
Article 6 ..................................................................................... 403<br />
Article 7 ..................................................................................... 403<br />
Article 8 ..................................................................................... 403<br />
Article 9 ..................................................................................... 403<br />
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Agreement on an<br />
International Energy Program<br />
(As amended to 7th August 1992)<br />
THE GOVERNMENTS OF THE REPUBLIC OF AUSTRIA, THE KINGDOM<br />
OF BELGIUM, CANADA, THE KINGDOM OF DENMARK, THE FEDERAL<br />
REPUBLIC OF GERMANY, IRELAND, THE ITALIAN REPUBLIC, JAPAN, THE<br />
GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS,<br />
SPAIN, THE KINGDOM OF SWEDEN, THE SWISS CONFEDERATION, THE<br />
REPUBLIC OF TURKEY, THE UNITED KINGDOM OF GREAT BRITAIN AND<br />
NORTHERN IRELAND, AND THE UNITED STATES OF AMERICA,<br />
DESIRING to promote secure oil supplies on reasonable and equitable<br />
terms,<br />
DETERMINED to take common effective measures to meet oil supply<br />
emergencies by developing an emergency self-sufficiency in oil supplies,<br />
restraining demand and allocating available oil among <strong>the</strong>ir countries on an<br />
equitable basis,<br />
DESIRING to promote co-operative relations with oil producing<br />
countries and with o<strong>the</strong>r oil consuming countries, including those <strong>of</strong> <strong>the</strong><br />
developing world, through a purposeful dialogue, as well as through o<strong>the</strong>r<br />
forms <strong>of</strong> co-operation, to fur<strong>the</strong>r <strong>the</strong> opportunities for a better understanding<br />
between consumer and producer countries,<br />
MINDFUL <strong>of</strong> <strong>the</strong> interests <strong>of</strong> o<strong>the</strong>r oil consuming countries, including<br />
those <strong>of</strong> <strong>the</strong> developing world,<br />
DESIRING to play a more active role in relation to <strong>the</strong> oil industry by<br />
establishing a comprehensive international information system and a<br />
permanent framework for consultation with oil companies,<br />
DETERMINED to reduce <strong>the</strong>ir dependence on imported oil by<br />
undertaking long-term co-operative efforts on conservation <strong>of</strong> energy, on<br />
accelerated development <strong>of</strong> alternative sources <strong>of</strong> energy, on research and<br />
development in <strong>the</strong> energy field and on uranium enrichment,<br />
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CONVINCED that <strong>the</strong>se objectives can only be reached through<br />
continued co-operative efforts within effective organs,<br />
EXPRESSING <strong>the</strong> intention that such organs be created within <strong>the</strong><br />
framework <strong>of</strong> <strong>the</strong> Organisation for Economic Co-operation and Development,<br />
RECOGNISING that o<strong>the</strong>r Member countries <strong>of</strong> <strong>the</strong> Organisation <strong>of</strong><br />
Economic Co-operation and Development may desire to join in <strong>the</strong>ir efforts,<br />
CONSIDERING <strong>the</strong> special responsibility <strong>of</strong> governments for energy<br />
supply,<br />
CONCLUDE that it is necessary to establish an International Energy<br />
Program to be implemented through an International Energy Agency, and<br />
to that end,<br />
HAVE AGREED as follows:<br />
Article 1<br />
1. <strong>The</strong> Participating Countries shall implement <strong>the</strong> International Energy<br />
Program as provided for in this Agreement through <strong>the</strong> International Energy<br />
Agency, described in Chapter IX, hereinafter referred to as <strong>the</strong> “Agency”.<br />
2. <strong>The</strong> term “Participating Countries” means States to which this<br />
Agreement applies provisionally and States <strong>of</strong> which <strong>the</strong> Agreement has<br />
entered into and remains in force.<br />
3. <strong>The</strong> term “group” means <strong>the</strong> Participating Countries as a group.<br />
Chapter I<br />
EMERGENCY SELF-SUFFICIENCY<br />
Article 2<br />
1. <strong>The</strong> Participating Countries shall establish a common emergency<br />
self-sufficiency in oil supplies. To this end, each Participating Country shall<br />
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maintain emergency reserves sufficient to sustain consumption for at least<br />
60 days with no net oil imports. Both consumption and net oil imports shall<br />
be reckoned at <strong>the</strong> average daily level <strong>of</strong> <strong>the</strong> previous calendar year.<br />
2. <strong>The</strong> Governing Board shall, acting by special majority, not later<br />
than 1st July, 1975, decide <strong>the</strong> date from which <strong>the</strong> emergency reserve<br />
commitment <strong>of</strong> each Participating Country shall, for <strong>the</strong> purpose <strong>of</strong> calculating<br />
its supply right referred to in Article 7, be deemed to be raised to a level <strong>of</strong><br />
90 days. Each Participating Country shall increase its actual level <strong>of</strong> emergency<br />
reserves to 90 days and shall endeavour to do so by <strong>the</strong> date so decided.<br />
3. <strong>The</strong> term “emergency reserve commitment” means <strong>the</strong> emergency<br />
reserves equivalent to 60 days <strong>of</strong> net oil imports as set out in paragraph 1<br />
and, from <strong>the</strong> date to be decided according to paragraph 2, to 90 days <strong>of</strong> net<br />
oil imports as set out in paragraph 2.<br />
Article 3<br />
1. <strong>The</strong> emergency reserve commitment set out in Article 2 may be<br />
satisfied by:<br />
– oil stocks,<br />
– fuel switching capacity,<br />
– stand-by oil production,<br />
in accordance with <strong>the</strong> provisions <strong>of</strong> <strong>the</strong> Annex which forms an integral part<br />
<strong>of</strong> this Agreement.<br />
2. <strong>The</strong> Governing Board shall, acting by majority, not later than 1st<br />
July, 1975, decide <strong>the</strong> extent to which <strong>the</strong> emergency reserve commitment<br />
may be satisfied by <strong>the</strong> elements mentioned in paragraph 1.<br />
Article 4<br />
1. <strong>The</strong> Standing Group on Emergency Questions shall, on a<br />
continuing basis, review <strong>the</strong> effectiveness <strong>of</strong> <strong>the</strong> measures taken by each<br />
Participating Country to meet its emergency reserve commitment.<br />
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2. <strong>The</strong> Standing Group on Emergency Questions shall report to <strong>the</strong><br />
Management Committee, which shall make proposals, as appropriate, to <strong>the</strong><br />
Governing Board. <strong>The</strong> Governing Board may, acting by majority, adopt<br />
recommendations to Participating Countries.<br />
Chapter II<br />
DEMAND RESTRAINT<br />
Article 5<br />
1. Each Participating Country shall at all times have ready a<br />
program <strong>of</strong> contingent oil demand restraint measures enabling it to reduce<br />
its rate <strong>of</strong> final consumption in accordance with Chapter IV.<br />
2. <strong>The</strong> Standing Group on Emergency Questions shall, on a<br />
continuing basis, review and assess:<br />
– each Participating Country’s program <strong>of</strong> demand restraint<br />
measures,<br />
– <strong>the</strong> effectiveness <strong>of</strong> measures actually taken by each Participating<br />
Country.<br />
3. <strong>The</strong> Standing Group on Emergency Questions shall report to <strong>the</strong><br />
Management Committee, which shall make proposals, as appropriate, to <strong>the</strong><br />
Governing Board. <strong>The</strong> Governing Board may, acting by majority, adopt<br />
recommendations to Participating Countries.<br />
Chapter III<br />
ALLOCATION<br />
Article 6<br />
1. Each Participating Country shall take <strong>the</strong> necessary measures in<br />
order that allocation <strong>of</strong> oil will be carried out pursuant to this Chapter and<br />
Chapter IV.<br />
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2. <strong>The</strong> Standing Group on Emergency Questions shall, on a continuing<br />
basis, review and assess:<br />
– each Participating Country’s measures in order that allocation <strong>of</strong><br />
oil will be carried out pursuant to this Chapter and Chapter IV,<br />
– <strong>the</strong> effectiveness <strong>of</strong> measures actually taken by each Participating<br />
Country.<br />
3. <strong>The</strong> Standing Group on Emergency Questions shall report to <strong>the</strong><br />
Management Committee, which shall make proposals, as appropriate, to <strong>the</strong><br />
Governing Board. <strong>The</strong> Governing Board may, acting by majority, adopt<br />
recommendations to Participating Countries.<br />
4. <strong>The</strong> Governing Board shall, acting by majority, decide promptly<br />
on <strong>the</strong> practical procedures for <strong>the</strong> allocation <strong>of</strong> oil and on <strong>the</strong> procedures<br />
and modalities for <strong>the</strong> participation <strong>of</strong> oil companies <strong>the</strong>rein within <strong>the</strong><br />
framework <strong>of</strong> this Agreement.<br />
Article 7<br />
1. When allocation <strong>of</strong> oil is carried out pursuant to Article 13, 14,<br />
or 15, each Participating Country shall have a supply right equal to its<br />
permissible consumption less its emergency reserve drawdown obligation.<br />
2. A Participating Country whose supply right exceeds <strong>the</strong> sum <strong>of</strong><br />
its normal domestic production and actual net imports available during an<br />
emergency shall have an allocation right which entitles it to additional net<br />
imports equal to that excess.<br />
3. A Participating Country in which <strong>the</strong> sum <strong>of</strong> normal domestic<br />
production and actual net imports available during an emergency exceeds<br />
its supply right shall have an allocation obligation which requires it to<br />
supply, directly or indirectly, <strong>the</strong> quantity <strong>of</strong> oil equal to that excess to o<strong>the</strong>r<br />
Participating Countries. This would not preclude any Participating Country<br />
from maintaining exports <strong>of</strong> oil to non-participating countries.<br />
4. <strong>The</strong> term “permissible consumption” means <strong>the</strong> average daily<br />
rate <strong>of</strong> final consumption allowed when emergency demand restraint at <strong>the</strong><br />
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applicable level has been activated; possible fur<strong>the</strong>r voluntary demand<br />
restraint by any Participating Country shall not affect its allocation right or<br />
obligation.<br />
5. <strong>The</strong> term “emergency reserve drawdown obligation” means <strong>the</strong><br />
emergency reserve commitment <strong>of</strong> any Participating Country divided by <strong>the</strong><br />
total emergency reserve commitment <strong>of</strong> <strong>the</strong> group and multiplied by <strong>the</strong><br />
group supply shortfall.<br />
6. <strong>The</strong> term “group supply shortfall” means <strong>the</strong> shortfall for <strong>the</strong><br />
group as measured by <strong>the</strong> aggregate permissible consumption for <strong>the</strong> group<br />
minus <strong>the</strong> daily rate <strong>of</strong> oil supplies available to <strong>the</strong> group during an<br />
emergency.<br />
7. <strong>The</strong> term “oil supplies available to <strong>the</strong> group” means<br />
– all crude oil available to <strong>the</strong> group,<br />
– all petroleum products imported from outside <strong>the</strong> group, and<br />
– all finished products and refinery feedstocks which are<br />
produced in association with natural gas and crude oil and<br />
are available to <strong>the</strong> group.<br />
8. <strong>The</strong> term “final consumption” means total domestic consumption<br />
<strong>of</strong> all finished petroleum products.<br />
Article 8<br />
1. When allocation <strong>of</strong> oil to a Participating Country is carried out<br />
pursuant to Article 17, that Participating country shall<br />
– sustain from its final consumption <strong>the</strong> reduction in its oil<br />
supplies up to a level equal to 7 per cent <strong>of</strong> its final consumption<br />
during <strong>the</strong> base period,<br />
– have an allocation right equal to <strong>the</strong> reduction in its oil<br />
supplies which results in a reduction <strong>of</strong> its final consumption<br />
over and above that level.<br />
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2. <strong>The</strong> obligation to allocate this amount <strong>of</strong> oil is shared among <strong>the</strong><br />
o<strong>the</strong>r Participating Countries on <strong>the</strong> basis <strong>of</strong> <strong>the</strong>ir final consumption during<br />
<strong>the</strong> base period.<br />
3. <strong>The</strong> Participating Countries may meet <strong>the</strong>ir allocation obligations<br />
by any measures <strong>of</strong> <strong>the</strong>ir own choosing, including demand restraint measures<br />
or use <strong>of</strong> emergency reserves.<br />
Article 9<br />
1. For purposes <strong>of</strong> satisfying allocation rights and allocation<br />
obligations, <strong>the</strong> following elements will be included:<br />
– all crude oil,<br />
– all petroleum products,<br />
– all refinery feedstocks, and<br />
– all finished products produced in association with natural gas<br />
and crude oil.<br />
2. To calculate a Participating Country’s allocation right, petroleum<br />
products normally imported by that Participating Country, whe<strong>the</strong>r from<br />
o<strong>the</strong>r Participating Countries or from non-participating countries, shall be<br />
expressed in crude oil equivalent and treated as though <strong>the</strong>y were imports <strong>of</strong><br />
crude oil to that Participating Country.<br />
3. Ins<strong>of</strong>ar as possible, normal channels <strong>of</strong> supply will be<br />
maintained as well as <strong>the</strong> normal supply proportions between crude oil<br />
and products and among different categories <strong>of</strong> crude oil and<br />
products.<br />
4. When allocation takes place, an objective <strong>of</strong> <strong>the</strong> Program shall<br />
be that available crude oil and products shall, ins<strong>of</strong>ar as possible, be<br />
shared within <strong>the</strong> refining and distributing industries as well as between<br />
refining and distributing companies in accordance with historical supply<br />
patterns.<br />
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Article 10<br />
1. <strong>The</strong> objectives <strong>of</strong> <strong>the</strong> Program shall include ensuring fair<br />
treatment for all Participating Countries and basing <strong>the</strong> price for allocated oil<br />
on <strong>the</strong> price conditions prevailing for comparable commercial transactions.<br />
2. Questions relating to <strong>the</strong> price <strong>of</strong> oil allocated during an emergency<br />
shall be examined by <strong>the</strong> Standing Group on Emergency Questions.<br />
Article 11<br />
1. It is not an objective <strong>of</strong> <strong>the</strong> Program to seek to increase, in an<br />
emergency, <strong>the</strong> share <strong>of</strong> world oil supply that <strong>the</strong> group had under normal<br />
market conditions. Historical oil trade patterns should be preserved as far<br />
as is reasonable, and due account should be taken <strong>of</strong> <strong>the</strong> position <strong>of</strong><br />
individual non-participating countries.<br />
2. In order to maintain <strong>the</strong> principles set out in paragraph 1, <strong>the</strong><br />
Management Committee shall make proposals, as appropriate, to<br />
<strong>the</strong> Governing Board, which, acting by majority, shall decide on such<br />
proposals.<br />
Chapter IV<br />
ACTIVATION<br />
ACTIVATION<br />
Article 12<br />
Whenever <strong>the</strong> group as a whole or any Participating Country sustains<br />
or can reasonably be expected to sustain a reduction in its oil supplies, <strong>the</strong><br />
emergency measures, which are <strong>the</strong> mandatory demand restraint referred to<br />
in Chapter II and <strong>the</strong> allocation <strong>of</strong> available oil referred to in Chapter III,<br />
shall be activated in accordance with this Chapter.<br />
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Article 13<br />
Whenever <strong>the</strong> group sustains or can reasonably be expected to sustain<br />
a reduction in <strong>the</strong> daily rate <strong>of</strong> its oil supplies at least equal to 7 per cent <strong>of</strong><br />
<strong>the</strong> average daily rate <strong>of</strong> its final consumption during <strong>the</strong> base period, each<br />
Participating Country shall implement demand restraint measures sufficient<br />
to reduce its final consumption by an amount equal to 7 per cent <strong>of</strong> its final<br />
consumption during <strong>the</strong> base period, and allocation <strong>of</strong> available oil among<br />
<strong>the</strong> Participating Countries shall take place in accordance with Articles 7, 9,<br />
10 and 11.<br />
Article 14<br />
Whenever <strong>the</strong> group sustains or can reasonably be expected to sustain<br />
a reduction in <strong>the</strong> daily rate <strong>of</strong> its oil supplies at least equal to 12 per cent <strong>of</strong><br />
<strong>the</strong> average daily rate <strong>of</strong> its final consumption during <strong>the</strong> base period, each<br />
Participating Country shall implement demand restraint measures sufficient<br />
to reduce its final consumption by an amount equal to 10 per cent <strong>of</strong> its<br />
final consumption during <strong>the</strong> base period, and allocation <strong>of</strong> available oil<br />
among <strong>the</strong> Participating Countries shall take place in accordance with<br />
Articles 7, 9, 10 and 11.<br />
Article 15<br />
When cumulative daily emergency reserve drawdown obligations as<br />
defined in Article 7 have reached 50 per cent <strong>of</strong> emergency reserve<br />
commitments and a decision has been taken in accordance with Article <strong>20</strong>,<br />
each Participating Country shall take <strong>the</strong> measures so decided, and<br />
allocation <strong>of</strong> available oil among <strong>the</strong> Participating Countries shall take place<br />
in accordance with Article 7, 9, 10 and 11.<br />
Article 16<br />
When demand restraint is activated in accordance with this Chapter,<br />
a Participating Country may substitute for demand restraint measures use<br />
<strong>of</strong> emergency reserves held in excess <strong>of</strong> its emergency reserve commitment<br />
as provided in <strong>the</strong> Program.<br />
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Article 17<br />
1. Whenever any Participating Country sustains or can reasonably<br />
be expected to sustain a reduction in <strong>the</strong> daily rate <strong>of</strong> its oil supplies which<br />
results in a reduction <strong>of</strong> <strong>the</strong> daily rate <strong>of</strong> its final consumption by an amount<br />
exceeding 7 per cent <strong>of</strong> <strong>the</strong> average daily rate <strong>of</strong> its final consumption during<br />
<strong>the</strong> base period, allocation <strong>of</strong> available oil to that Participating Country shall<br />
take place in accordance with Articles 8 to 11.<br />
2. Allocation <strong>of</strong> available oil shall also take place when <strong>the</strong> conditions in<br />
paragraph 1 are fulfilled in a major region <strong>of</strong> a Participating Country whose oil<br />
market is incompletely integrated. In this case, <strong>the</strong> allocation obligation <strong>of</strong> o<strong>the</strong>r<br />
Participating Countries shall be reduced by <strong>the</strong> <strong>the</strong>oretical allocation obligation<br />
<strong>of</strong> any o<strong>the</strong>r major region or regions <strong>of</strong> <strong>the</strong> Participating Country concerned.<br />
Article 18<br />
1. <strong>The</strong> term “base period” means <strong>the</strong> most recent four quarters with<br />
a delay <strong>of</strong> one-quarter necessary to collect information. While emergency<br />
measures are applied with regard to <strong>the</strong> group or to a Participating Country,<br />
<strong>the</strong> base period shall remain fixed.<br />
2. <strong>The</strong> Standing Group on Emergency Questions shall examine <strong>the</strong> base<br />
period set out in paragraph 1, taking into account in particular such factors as<br />
growth, seasonal variations in consumption and cyclical changes and shall, not later<br />
than 1st April, 1975, report to <strong>the</strong> Management Committee. <strong>The</strong> Management<br />
Committee shall make proposals, as appropriate, to <strong>the</strong> Governing Board, which,<br />
acting by majority, shall decide on <strong>the</strong>se proposals not later than 1st July, 1975.<br />
Article 19<br />
1. <strong>The</strong> Secretariat shall make a finding when a reduction <strong>of</strong> oil supplies<br />
as mentioned in Article 13, 14 or 17 has occurred or can reasonably be expected<br />
to occur, and shall establish <strong>the</strong> amount <strong>of</strong> <strong>the</strong> reduction or expected reduction<br />
for each Participating Country and for <strong>the</strong> group. <strong>The</strong> Secretariat shall keep <strong>the</strong><br />
Management Committee informed <strong>of</strong> its deliberations, and shall immediately report<br />
its finding to <strong>the</strong> members <strong>of</strong> <strong>the</strong> Committee and inform <strong>the</strong> Participating Countries<br />
<strong>the</strong>re<strong>of</strong>. <strong>The</strong> report shall include information on <strong>the</strong> nature <strong>of</strong> <strong>the</strong> reduction.<br />
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2. Within 48 hours <strong>of</strong> <strong>the</strong> Secretariat’s reporting a finding, <strong>the</strong><br />
Committee shall meet to review <strong>the</strong> accuracy <strong>of</strong> <strong>the</strong> data compiled and <strong>the</strong><br />
information provided. <strong>The</strong> Committee shall report to <strong>the</strong> Governing Board<br />
within a fur<strong>the</strong>r 48 hours. <strong>The</strong> report shall set out <strong>the</strong> views expressed by<br />
<strong>the</strong> members <strong>of</strong> <strong>the</strong> Committee, including any views regarding <strong>the</strong> handling<br />
<strong>of</strong> <strong>the</strong> emergency.<br />
3. Within 48 hours <strong>of</strong> receiving <strong>the</strong> Management Committee’s report, <strong>the</strong><br />
Governing Board shall meet to review <strong>the</strong> finding <strong>of</strong> <strong>the</strong> Secretariat in <strong>the</strong> light<br />
<strong>of</strong> that report. <strong>The</strong> activation <strong>of</strong> emergency measures shall be considered<br />
confirmed and Participating Countries shall implement such measures within<br />
15 days <strong>of</strong> such confirmation unless <strong>the</strong> Governing Board, acting by special<br />
majority, decides within a fur<strong>the</strong>r 48 hours not to activate <strong>the</strong> emergency measures,<br />
to activate <strong>the</strong>m only in part or to fix ano<strong>the</strong>r time limit for <strong>the</strong>ir implementation.<br />
4. If, according to <strong>the</strong> finding <strong>of</strong> <strong>the</strong> Secretariat, <strong>the</strong> conditions <strong>of</strong><br />
more than one <strong>of</strong> <strong>the</strong> Articles 14, 13 and 17 are fulfilled, any decision not to<br />
activate emergency measures shall be taken separately for each Article and<br />
in <strong>the</strong> above order. If <strong>the</strong> conditions in Article 17 are fulfilled with regard to<br />
more than one Participating Country any decision not to activate allocation<br />
shall be taken separately with respect to each Country.<br />
5. Decisions pursuant to paragraphs 3 and 4 may, at any time be<br />
reversed by <strong>the</strong> Governing Board, acting by majority.<br />
6. In making its finding under this Article, <strong>the</strong> Secretariat shall<br />
consult with oil companies to obtain <strong>the</strong>ir views regarding <strong>the</strong> situation and<br />
<strong>the</strong> appropriateness <strong>of</strong> <strong>the</strong> measures to be taken.<br />
7. An international advisory board from <strong>the</strong> oil industry shall be<br />
convened, not later than <strong>the</strong> activation <strong>of</strong> emergency measures, to assist <strong>the</strong><br />
Agency in ensuring <strong>the</strong> effective operation <strong>of</strong> such measures.<br />
Article <strong>20</strong><br />
1. <strong>The</strong> Secretariat shall make a finding when cumulative daily<br />
emergency reserve drawdown obligations have reached or can reasonably be<br />
expected to reach 50 per cent <strong>of</strong> emergency reserve commitments. <strong>The</strong><br />
Secretariat shall immediately report its finding to <strong>the</strong> members <strong>of</strong> <strong>the</strong><br />
369
Management Committee and inform <strong>the</strong> Participating Countries <strong>the</strong>re<strong>of</strong>.<br />
<strong>The</strong> report shall include information on <strong>the</strong> oil situation.<br />
2. Within 72 hours <strong>of</strong> <strong>the</strong> Secretariat’s reporting such a finding, <strong>the</strong><br />
Management Committee shall meet to review <strong>the</strong> data compiled and <strong>the</strong><br />
information provided. On <strong>the</strong> basis <strong>of</strong> available information <strong>the</strong> Committee<br />
shall report to <strong>the</strong> Governing Board within a fur<strong>the</strong>r 48 hours proposing<br />
measures required for meeting <strong>the</strong> necessities <strong>of</strong> <strong>the</strong> situation, including <strong>the</strong><br />
increase in <strong>the</strong> level <strong>of</strong> mandatory demand restraint that may be necessary. <strong>The</strong><br />
report shall set out <strong>the</strong> views expressed by <strong>the</strong> members <strong>of</strong> <strong>the</strong> Committee.<br />
3. <strong>The</strong> Governing Board shall meet within 48 hours <strong>of</strong> receiving <strong>the</strong><br />
Committee’s report and proposal. <strong>The</strong> Governing Board shall review <strong>the</strong><br />
finding <strong>of</strong> <strong>the</strong> Secretariat and <strong>the</strong> report <strong>of</strong> <strong>the</strong> Management Committee and<br />
shall within a fur<strong>the</strong>r 48 hours, acting by special majority, decide on <strong>the</strong><br />
measures required for meeting <strong>the</strong> necessities <strong>of</strong> <strong>the</strong> situation, including <strong>the</strong><br />
increase in <strong>the</strong> level <strong>of</strong> mandatory demand restraint that may be necessary.<br />
Article 21<br />
1. Any Participating Country may request <strong>the</strong> Secretariat to make a<br />
finding under Article 19 or <strong>20</strong>.<br />
2. If, within 72 hours <strong>of</strong> such request, <strong>the</strong> Secretariat does not make<br />
such a finding, <strong>the</strong> Participating Country may request <strong>the</strong> Management<br />
Committee to meet and consider <strong>the</strong> situation in accordance with <strong>the</strong><br />
provisions <strong>of</strong> this Agreement.<br />
3. <strong>The</strong> Management Committee shall meet within 48 hours <strong>of</strong> such<br />
request in order to consider <strong>the</strong> situation. It shall, at request <strong>of</strong> any<br />
Participating Country, report to <strong>the</strong> Governing Board within a fur<strong>the</strong>r 48<br />
hours. <strong>The</strong> report shall set out <strong>the</strong> views expressed by <strong>the</strong> members <strong>of</strong> <strong>the</strong><br />
Committee and by <strong>the</strong> Secretariat, including any views regarding <strong>the</strong><br />
handling <strong>of</strong> <strong>the</strong> situation.<br />
4. <strong>The</strong> Governing Board shall meet within 48 hours <strong>of</strong> receiving <strong>the</strong><br />
Management Committee’s report. If it finds, acting by majority, that <strong>the</strong><br />
conditions set out in Article 13, 14, 15 or 17 are fulfilled, emergency<br />
measures shall be activated accordingly.<br />
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Article 22<br />
<strong>The</strong> Governing Board may at any time decide by unanimity to<br />
activate any appropriate emergency measures not provided for in this<br />
Agreement, if <strong>the</strong> situation so requires.<br />
DEACTIVATION<br />
Article 23<br />
1. <strong>The</strong> Secretariat shall make a finding when a reduction <strong>of</strong> supplies<br />
as mentioned in Article 13, 14 or 17 has decreased or can reasonably be<br />
expected to decrease below <strong>the</strong> level referred to in <strong>the</strong> relevant Article. <strong>The</strong><br />
Secretariat shall keep <strong>the</strong> Management Committee informed <strong>of</strong> its<br />
deliberations and shall immediately report its finding to <strong>the</strong> members <strong>of</strong> <strong>the</strong><br />
Committee and inform <strong>the</strong> Participating Countries <strong>the</strong>re<strong>of</strong>.<br />
2. Within 72 hours <strong>of</strong> <strong>the</strong> Secretariat’s reporting a finding, <strong>the</strong><br />
Management Committee shall meet to review <strong>the</strong> data complied and <strong>the</strong><br />
information provided. It shall report to <strong>the</strong> Governing Board within a<br />
fur<strong>the</strong>r 48 hours. <strong>The</strong> report shall set out <strong>the</strong> views expressed by <strong>the</strong><br />
members <strong>of</strong> <strong>the</strong> Committee, including any views regarding <strong>the</strong> handling <strong>of</strong><br />
<strong>the</strong> emergency.<br />
3. Within 48 hours <strong>of</strong> receiving <strong>the</strong> Committee’s report, <strong>the</strong><br />
Governing Board shall meet to review <strong>the</strong> finding <strong>of</strong> <strong>the</strong> Secretariat in <strong>the</strong><br />
light <strong>of</strong> <strong>the</strong> report from <strong>the</strong> Management Committee. <strong>The</strong> deactivation <strong>of</strong><br />
emergency measures or <strong>the</strong> applicable reduction <strong>of</strong> <strong>the</strong> demand restraint<br />
level shall be considered confirmed unless <strong>the</strong> Governing Board, acting by<br />
special majority, decides within a fur<strong>the</strong>r 48 hours to maintain <strong>the</strong><br />
emergency measures or to deactivate <strong>the</strong>m only in part.<br />
4. In making its finding under this Article, <strong>the</strong> Secretariat shall<br />
consult with <strong>the</strong> international advisory board, mentioned in Article 19,<br />
paragraph 7, to obtain its views regarding <strong>the</strong> situation and <strong>the</strong><br />
appropriateness <strong>of</strong> <strong>the</strong> measures to be taken.<br />
5. Any Participating Country may request <strong>the</strong> Secretariat to make a<br />
finding under this Article.<br />
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Article 24<br />
When emergency measures are in force, and <strong>the</strong> Secretariat has not<br />
made a finding under Article 23, <strong>the</strong> Governing Board, acting by special<br />
majority, may at any time decide to deactivate <strong>the</strong> measures ei<strong>the</strong>r wholly or<br />
in part.<br />
Chapter V<br />
INFORMATION SYSTEM ON THE<br />
INTERNATIONAL OIL MARKET<br />
Article 25<br />
1. <strong>The</strong> Participating Countries shall establish an Information<br />
System consisting <strong>of</strong> two sections:<br />
– a General Section on <strong>the</strong> situation in <strong>the</strong> international oil<br />
market and activities <strong>of</strong> oil companies,<br />
– a Special Section designed to ensure <strong>the</strong> efficient operation <strong>of</strong><br />
<strong>the</strong> measures described in Chapters I to IV.<br />
2. <strong>The</strong> System shall be operated on a permanent basis, both under<br />
normal conditions and during emergencies, and in a manner which ensures<br />
<strong>the</strong> confidentiality <strong>of</strong> <strong>the</strong> information made available.<br />
3. <strong>The</strong> Secretariat shall be responsible for <strong>the</strong> operation <strong>of</strong> <strong>the</strong><br />
Information System and shall make <strong>the</strong> information compiled available to<br />
<strong>the</strong> Participating Countries.<br />
Article 26<br />
<strong>The</strong> term “oil companies” means international companies, national<br />
companies, non-integrated companies and o<strong>the</strong>r entities which play a<br />
significant role in <strong>the</strong> international oil industry.<br />
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GENERAL SECTION<br />
Article 27<br />
1. Under <strong>the</strong> General Section <strong>of</strong> <strong>the</strong> Information System, <strong>the</strong><br />
Participating Countries shall, on a regular basis, make available to <strong>the</strong><br />
Secretariat information on <strong>the</strong> precise data identified in accordance with<br />
Article 29 on <strong>the</strong> following subjects relating to oil companies operating<br />
within <strong>the</strong>ir respective jurisdictions:<br />
(a) Corporate structure;<br />
(b) Financial structure, including balance sheets, pr<strong>of</strong>it and loss<br />
accounts, and taxes paid;<br />
(c) Capital investments realized;<br />
(d) Terms <strong>of</strong> arrangements for access to major sources <strong>of</strong> crude<br />
oil;<br />
(e) Current rates <strong>of</strong> production and anticipated changes<br />
<strong>the</strong>rein;<br />
(f) Allocations <strong>of</strong> available crude supplies to affiliates and o<strong>the</strong>r<br />
customers (criteria and realizations);<br />
(g) Stocks;<br />
(h) Cost <strong>of</strong> crude oil and oil products;<br />
(i) Prices, including transfer prices to affiliates;<br />
(j) O<strong>the</strong>r subjects, as decided by <strong>the</strong> Governing Board, acting by<br />
unanimity.<br />
2. Each Participating Country shall take appropriate measures to<br />
ensure that all oil companies operating within its jurisdiction make such<br />
information available to it as is necessary to fulfil its obligations under<br />
paragraph 1, taking into account such relevant information as is already<br />
available to <strong>the</strong> public or to Governments.<br />
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3. Each Participating Country shall provide information on a nonproprietary<br />
basis and on a company and/or country basis as appropriate, and<br />
in such a manner and degree as will not prejudice competition or conflict with<br />
<strong>the</strong> legal requirements <strong>of</strong> any Participating Country relating to competition.<br />
4. No Participating Country shall be entitled to obtain, through <strong>the</strong><br />
General Section, any information on <strong>the</strong> activities <strong>of</strong> a company operating<br />
within its jurisdiction which could not be obtained by it from that company<br />
by application <strong>of</strong> its laws or through its institutions and customs if that<br />
company were operating solely within its jurisdiction.<br />
Article 28<br />
Information provided on a “non-proprietary basis” means information<br />
which does not constitute or relate to patents, trademarks, scientific or<br />
manufacturing processes or developments, individual sales, tax returns,<br />
customer lists or geological and geophysical information, including maps.<br />
Article 29<br />
1. Within 60 days <strong>of</strong> <strong>the</strong> first day <strong>of</strong> <strong>the</strong> provisional application <strong>of</strong><br />
this Agreement, and as appropriate <strong>the</strong>reafter, <strong>the</strong> Standing Group on <strong>the</strong><br />
Oil Market shall submit a report to <strong>the</strong> Management Committee identifying<br />
<strong>the</strong> precise data within <strong>the</strong> list <strong>of</strong> subjects in Article 27, paragraph 1, which<br />
are required for <strong>the</strong> efficient operation <strong>of</strong> <strong>the</strong> General Section, and<br />
specifying <strong>the</strong> procedures for obtaining such data on a regular basis.<br />
2. <strong>The</strong> Management Committee shall review <strong>the</strong> report and make<br />
proposals to <strong>the</strong> Governing Board which, within 30 days <strong>of</strong> <strong>the</strong> submission<br />
<strong>of</strong> <strong>the</strong> report to <strong>the</strong> Management Committee, and acting by majority, shall<br />
take <strong>the</strong> decisions necessary for <strong>the</strong> establishment and efficient operation <strong>of</strong><br />
<strong>the</strong> General Section.<br />
Article 30<br />
In preparing its reports under Article 29, <strong>the</strong> Standing Group on <strong>the</strong><br />
Oil Market shall<br />
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– consult with oil companies to ensure that <strong>the</strong> System is<br />
compatible with industry operations;<br />
– identify specific problems and issues which are <strong>of</strong> concern to<br />
Participating Countries;<br />
– identify specific data which are useful and necessary to<br />
resolve such problems and issues;<br />
– work out precise standards for <strong>the</strong> harmonization <strong>of</strong> <strong>the</strong> required<br />
information in order to ensure comparability <strong>of</strong> <strong>the</strong> data;<br />
– work out procedures to ensure <strong>the</strong> confidentiality <strong>of</strong> <strong>the</strong> information.<br />
Article 31<br />
1. <strong>The</strong> Standing Group on <strong>the</strong> Oil Market shall on a continuing<br />
basis review <strong>the</strong> operation <strong>of</strong> <strong>the</strong> General Section.<br />
2. In <strong>the</strong> event <strong>of</strong> changes in <strong>the</strong> conditions <strong>of</strong> <strong>the</strong> international oil<br />
market, <strong>the</strong> Standing Group on <strong>the</strong> Oil market shall report to <strong>the</strong><br />
Management Committee. <strong>The</strong> Committee shall make proposals on<br />
appropriate changes to <strong>the</strong> Governing Board which, acting by majority, shall<br />
decide on such proposals.<br />
SPECIAL SECTION<br />
Article 32<br />
1. Under <strong>the</strong> Special Section <strong>of</strong> <strong>the</strong> Information System, <strong>the</strong><br />
Participating Countries shall make available to <strong>the</strong> Secretariat all information<br />
which is necessary to ensure <strong>the</strong> efficient operation <strong>of</strong> emergency measures.<br />
2. Each Participating Country shall take appropriate measures to<br />
ensure that all oil companies operating within its jurisdiction make such<br />
information available to it as is necessary to enable it to fulfil its obligations<br />
under paragraph 1 and under Article 33.<br />
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3. <strong>The</strong> Secretariat shall, on <strong>the</strong> basis <strong>of</strong> this information and o<strong>the</strong>r<br />
information available, continuously survey <strong>the</strong> supply <strong>of</strong> oil to and <strong>the</strong><br />
consumption <strong>of</strong> oil within <strong>the</strong> group and each Participating Country.<br />
Article 33<br />
Under <strong>the</strong> Special Section, <strong>the</strong> Participating Countries shall, on a<br />
regular basis, make available to <strong>the</strong> Secretariat information on <strong>the</strong> precise<br />
data identified in accordance with Article 34 on <strong>the</strong> following subjects:<br />
(a) Oil consumption and supply;<br />
(b) Demand restraint measures;<br />
(c) Levels <strong>of</strong> emergency reserves;<br />
(d) Availability and utilization <strong>of</strong> transportation facilities;<br />
(e) Current and projected levels <strong>of</strong> international supply and demand;<br />
(f)<br />
O<strong>the</strong>r subjects, as decided by <strong>the</strong> Governing Board, acting by<br />
unanimity.<br />
Article 34<br />
1. Within 30 days <strong>of</strong> <strong>the</strong> first day <strong>of</strong> <strong>the</strong> provisional application <strong>of</strong><br />
this Agreement, <strong>the</strong> Standing Group on Emergency Questions shall submit a<br />
report to <strong>the</strong> management Committee identifying <strong>the</strong> precise data within <strong>the</strong><br />
list <strong>of</strong> subjects in Article 33 which are required under <strong>the</strong> Special Section to<br />
ensure <strong>the</strong> efficient operation <strong>of</strong> emergency measures and specifying <strong>the</strong><br />
procedures for obtaining such data on a regular basis, including accelerated<br />
procedures in times <strong>of</strong> emergency.<br />
2. <strong>The</strong> Management Committee shall review <strong>the</strong> report and make<br />
proposals to <strong>the</strong> Governing Board which, within 30 days <strong>of</strong> <strong>the</strong> submission<br />
<strong>of</strong> <strong>the</strong> report to <strong>the</strong> Management Committee, and acting by majority, shall<br />
take <strong>the</strong> decisions necessary for <strong>the</strong> establishment and efficient operation <strong>of</strong><br />
<strong>the</strong> Special Section.<br />
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Article 35<br />
In preparing its report under Article 34, <strong>the</strong> Standing Group on<br />
Emergency Questions shall<br />
– consult with oil companies to ensure that <strong>the</strong> System is<br />
compatible with industry operations;<br />
– work out precise standards for <strong>the</strong> harmonization <strong>of</strong> <strong>the</strong> required<br />
information in order to ensure comparability <strong>of</strong> <strong>the</strong> data;<br />
– work out procedures to ensure <strong>the</strong> confidentiality <strong>of</strong> <strong>the</strong> information.<br />
Article 36<br />
<strong>The</strong> Standing Group on Emergency Questions shall on a continuing<br />
basis review <strong>the</strong> operation <strong>of</strong> <strong>the</strong> Special Section and shall, as appropriate,<br />
report to <strong>the</strong> Management Committee. <strong>The</strong> Committee shall make proposals<br />
on appropriate changes to <strong>the</strong> Governing Board, which, acting by majority,<br />
shall decide on such proposals.<br />
Chapter VI<br />
FRAMEWORK FOR CONSULTATION<br />
WITH OIL COMPANIES<br />
Article 37<br />
1. <strong>The</strong> Participating Countries shall establish within <strong>the</strong> Agency a<br />
permanent framework for consultation within which one or more<br />
Participating Countries may, in an appropriate manner, consult with and<br />
request information from individual oil companies on all important aspects<br />
<strong>of</strong> <strong>the</strong> oil industry, and within which <strong>the</strong> Participating Countries may share<br />
among <strong>the</strong>mselves on a co-operative basis <strong>the</strong> results <strong>of</strong> such consultations.<br />
2. <strong>The</strong> framework for consultation shall be established under <strong>the</strong><br />
auspices <strong>of</strong> <strong>the</strong> Standing Group on <strong>the</strong> Oil Market.<br />
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3. Within 60 days <strong>of</strong> <strong>the</strong> first day <strong>of</strong> <strong>the</strong> provisional application <strong>of</strong> this<br />
Agreement, and as appropriate <strong>the</strong>reafter, <strong>the</strong> Standing Group on <strong>the</strong> Oil<br />
Market, after consultation with oil companies, shall submit a report to <strong>the</strong><br />
Management Committee on <strong>the</strong> procedures for such consultations. <strong>The</strong> Management<br />
Committee shall review <strong>the</strong> report and make proposals to <strong>the</strong> Governing<br />
Board, which, within 30 days <strong>of</strong> <strong>the</strong> submission <strong>of</strong> <strong>the</strong> report to <strong>the</strong> Management<br />
Committee, and acting by majority, shall decide on such procedures.<br />
Article 38<br />
1. <strong>The</strong> Standing Group on <strong>the</strong> Oil Market shall present a report to<br />
<strong>the</strong> Management Committee on consultations held with any oil company<br />
within 30 days <strong>the</strong>re<strong>of</strong>.<br />
2. <strong>The</strong> Management Committee shall consider <strong>the</strong> report and may<br />
make proposals on appropriate co-operative action to <strong>the</strong> Governing Board,<br />
which shall decide on such proposals.<br />
Article 39<br />
1. <strong>The</strong> Standing Group on <strong>the</strong> Oil Market shall, on a continuing<br />
basis, evaluate <strong>the</strong> results <strong>of</strong> <strong>the</strong> consultations with and <strong>the</strong> information<br />
collected from oil companies.<br />
2. On <strong>the</strong> basis <strong>of</strong> <strong>the</strong>se evaluations, <strong>the</strong> Standing Group may<br />
examine and assess <strong>the</strong> international oil situation and <strong>the</strong> position <strong>of</strong> <strong>the</strong> oil<br />
industry and shall report to <strong>the</strong> Management Committee.<br />
3. <strong>The</strong> Management Committee shall review such reports and make<br />
proposals on appropriate co-operative action to <strong>the</strong> Governing Board, which<br />
shall decide on such proposals.<br />
Article 40<br />
<strong>The</strong> Standing Group on <strong>the</strong> Oil market shall submit annually a<br />
general report to <strong>the</strong> Management Committee on <strong>the</strong> functioning <strong>of</strong> <strong>the</strong><br />
framework for consultation with oil companies.<br />
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Chapter VII<br />
LONG TERM CO-OPERATION ON ENERGY<br />
Article 41<br />
1. <strong>The</strong> Participating Countries are determined to reduce over <strong>the</strong><br />
longer term <strong>the</strong>ir dependence on imported oil for meeting <strong>the</strong>ir total energy<br />
requirements.<br />
2. To this end, <strong>the</strong> Participating Countries will undertake national<br />
programs and promote <strong>the</strong> adoption <strong>of</strong> co-operative programs, including, as<br />
appropriate, <strong>the</strong> sharing <strong>of</strong> means and efforts, while concerting national<br />
policies, in <strong>the</strong> areas set out in Article 42.<br />
Article 42<br />
1. <strong>The</strong> Standing Group on Long Term Co-operation shall examine<br />
and report to <strong>the</strong> Management Committee on co-operative action. <strong>The</strong><br />
following areas shall in particular be considered:<br />
(a) Conservation <strong>of</strong> energy, including co-operate programs on<br />
– exchange <strong>of</strong> national experiences and information on energy<br />
conservation;<br />
– ways and means for reducing <strong>the</strong> growth <strong>of</strong> energy<br />
consumption through conservation.<br />
(b) Development <strong>of</strong> alternative sources <strong>of</strong> energy such as<br />
domestic oil, coal, natural gas, nuclear energy and hydroelectric<br />
power, including co-operative programs on<br />
– exchange <strong>of</strong> information on such matters as resources,<br />
supply and demand, price and taxation;<br />
– ways and means for reducing <strong>the</strong> growth <strong>of</strong> consumption<br />
<strong>of</strong> imported oil through <strong>the</strong> development <strong>of</strong> alternative<br />
sources <strong>of</strong> energy;<br />
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– concrete projects, including jointly financed projects;<br />
– criteria, quality objectives and standards for environmental<br />
protection.<br />
(c) Energy research and development, including as a matter <strong>of</strong><br />
priority co-operative programs on<br />
– coal technology;<br />
– solar energy;<br />
– radioactive waste management;<br />
– controlled <strong>the</strong>rmonuclear fusion;<br />
– production <strong>of</strong> hydrogen from water;<br />
– nuclear safety;<br />
– waste heat utilization;<br />
– conservation <strong>of</strong> energy;<br />
– municipal and industrial waste utilization for energy<br />
conservation;<br />
– overall energy system analysis and general studies.<br />
(d) Uranium enrichment, including co-operative programs<br />
– to monitor developments in natural and enriched uranium<br />
supply;<br />
– to facilitate development <strong>of</strong> natural uranium resources<br />
and enrichment services;<br />
– to encourage such consultations as may be required to<br />
deal with international issues that may arise in relation to<br />
<strong>the</strong> expansion <strong>of</strong> enriched uranium supply;<br />
– to arrange for <strong>the</strong> requisite collection, analysis and dissemination<br />
<strong>of</strong> data related to <strong>the</strong> planning <strong>of</strong> enrichment<br />
services.<br />
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2. In examining <strong>the</strong> areas <strong>of</strong> co-operative action, <strong>the</strong> Standing<br />
Group shall take due account <strong>of</strong> ongoing activities elsewhere.<br />
3. Programs developed under paragraph 1 may be jointly financed.<br />
Such joint financing may take place in accordance with Article 64, paragraph 2.<br />
Article 43<br />
1. <strong>The</strong> Management Committee shall review <strong>the</strong> reports <strong>of</strong> <strong>the</strong><br />
Standing Group and make appropriate proposals to <strong>the</strong> Governing Board,<br />
which shall decide on <strong>the</strong>se proposals not later than 1st July, 1975.<br />
2. <strong>The</strong> Governing Board shall take into account possibilities for cooperation<br />
within a broader framework.<br />
Chapter VIII<br />
RELATIONS WITH PRODUCER COUNTRIES<br />
AND WITH OTHER CONSUMER COUNTRIES<br />
Article 44<br />
<strong>The</strong> Participating Countries will endeavour to promote co-operative<br />
relations with oil producing countries and with o<strong>the</strong>r oil consuming<br />
countries, including developing countries. <strong>The</strong>y will keep under review<br />
developments in <strong>the</strong> energy field with a view to identifying opportunities for<br />
and promoting a purposeful dialogue, as well as o<strong>the</strong>r forms <strong>of</strong> co-operation,<br />
with producer countries and with o<strong>the</strong>r consumer countries.<br />
Article 45<br />
To achieve <strong>the</strong> objectives set out in Article 44, <strong>the</strong> Participating<br />
Countries will give full consideration to <strong>the</strong> needs and interests <strong>of</strong> o<strong>the</strong>r oil<br />
consuming countries, particularly those <strong>of</strong> <strong>the</strong> developing countries.<br />
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Article 46<br />
<strong>The</strong> Participating Countries will, in <strong>the</strong> context <strong>of</strong> <strong>the</strong> Program,<br />
exchange views on <strong>the</strong>ir relations with oil producing countries. To this end,<br />
<strong>the</strong> Participating Countries should inform each o<strong>the</strong>r <strong>of</strong> co-operative action<br />
on <strong>the</strong>ir part with producer countries which is relevant to <strong>the</strong> objectives <strong>of</strong><br />
<strong>the</strong> Program.<br />
Article 47<br />
<strong>The</strong> Participating Countries will, in <strong>the</strong> context <strong>of</strong> <strong>the</strong> Program<br />
– seek, in <strong>the</strong> light <strong>of</strong> <strong>the</strong>ir continuous review <strong>of</strong> developments in<br />
<strong>the</strong> international energy situation and its effect on <strong>the</strong> world<br />
economy, opportunities and means <strong>of</strong> encouraging stable<br />
international trade in oil and <strong>of</strong> promoting secure oil supplies on<br />
reasonable and equitable terms for each Participating Country;<br />
– consider, in <strong>the</strong> light <strong>of</strong> work going on in o<strong>the</strong>r international<br />
organisations, o<strong>the</strong>r possible fields <strong>of</strong> co-operation including <strong>the</strong><br />
prospects for co-operation in accelerated industrialisation and<br />
socio-economic development in <strong>the</strong> principal producing areas and<br />
<strong>the</strong> implications <strong>of</strong> this for international trade and investment;<br />
– keep under review <strong>the</strong> prospects for co-operation with oil<br />
producing countries on energy questions <strong>of</strong> mutual interest, such<br />
as conservation <strong>of</strong> energy, <strong>the</strong> development <strong>of</strong> alternative sources,<br />
and research and development.<br />
Article 48<br />
1. <strong>The</strong> Standing Group on Relations with Producer and o<strong>the</strong>r<br />
Consumer Countries will examine and report to <strong>the</strong> Management<br />
Committee on <strong>the</strong> matters described in this Chapter.<br />
2. <strong>The</strong> Management Committee may make proposals on<br />
appropriate co-operative action regarding <strong>the</strong>se matters to <strong>the</strong> Governing<br />
Board, which shall decide on such proposals.<br />
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Chapter IX<br />
INSTITUTIONAL AND GENERAL PROVISIONS<br />
Article 49<br />
1. <strong>The</strong> Agency shall have <strong>the</strong> following organs:<br />
– a Governing Board<br />
– a Management Committee<br />
– Standing Groups on<br />
– Emergency Questions<br />
– <strong>The</strong> Oil Market<br />
– Long Term Co-operation<br />
– Relations with Producer and O<strong>the</strong>r Consumer Countries.<br />
2. <strong>The</strong> Governing Board or <strong>the</strong> Management Committee may, acting<br />
by majority, establish any o<strong>the</strong>r organ necessary for <strong>the</strong> implementation <strong>of</strong><br />
<strong>the</strong> Program.<br />
3. <strong>The</strong> Agency shall have a Secretariat to assist <strong>the</strong> organs mentioned<br />
in paragraphs 1 and 2.<br />
GOVERNING BOARD<br />
Article 50<br />
1. <strong>The</strong> Governing Board shall be composed <strong>of</strong> one or more ministers<br />
or <strong>the</strong>ir delegates from each Participating Country.<br />
2. <strong>The</strong> Governing Board, acting by majority, shall adopt its own rules<br />
<strong>of</strong> procedure. Unless o<strong>the</strong>rwise decided in <strong>the</strong> rules <strong>of</strong> procedure, <strong>the</strong>se rules<br />
shall also apply to <strong>the</strong> Management Committee and <strong>the</strong> Standing Groups.<br />
383
3. <strong>The</strong> Governing Board, acting by majority, shall elect its Chairman<br />
and Vice-Chairmen.<br />
Article 51<br />
1. <strong>The</strong> Governing Board shall adopt decisions and make recommendations<br />
which are necessary for <strong>the</strong> proper functioning <strong>of</strong> <strong>the</strong> Program.<br />
2. <strong>The</strong> Governing Board shall review periodically and take appropriate<br />
action concerning developments in <strong>the</strong> international energy situation, including<br />
problems relating to <strong>the</strong> oil supplies <strong>of</strong> any Participating Country or Countries,<br />
and <strong>the</strong> economic and monetary implications <strong>of</strong> <strong>the</strong>se developments. In its<br />
activities concerning <strong>the</strong> economic and monetary implications <strong>of</strong> developments<br />
in <strong>the</strong> international energy situation, <strong>the</strong> Governing Board shall take into<br />
account <strong>the</strong> competence and activities <strong>of</strong> international institutions responsible<br />
for overall economic and monetary questions.<br />
3. <strong>The</strong> Governing Board, acting by majority, may delegate any <strong>of</strong> its<br />
functions to any o<strong>the</strong>r organ <strong>of</strong> <strong>the</strong> Agency.<br />
Article 52<br />
1. Subject to Article 61, paragraph 2, and Article 65, decisions adopted<br />
pursuant to this Agreement by <strong>the</strong> Governing Board or by any o<strong>the</strong>r organ by<br />
delegation from <strong>the</strong> Board shall be binding on <strong>the</strong> Participating Countries.<br />
2. Recommendations shall not be binding.<br />
MANAGEMENT COMMITTEE<br />
Article 53<br />
1. <strong>The</strong> Management Committee shall be composed <strong>of</strong> one or more<br />
senior representatives <strong>of</strong> <strong>the</strong> Government <strong>of</strong> each Participating Country.<br />
2. <strong>The</strong> Management Committee shall carry out <strong>the</strong> functions assigned to<br />
it in this Agreement and any o<strong>the</strong>r function delegated to it by <strong>the</strong> Governing Board.<br />
384
3. <strong>The</strong> Management Committee may examine and make proposals<br />
to <strong>the</strong> Governing Board, as appropriate, on any matter within <strong>the</strong> scope <strong>of</strong><br />
this Agreement.<br />
4. <strong>The</strong> Management Committee shall be convened upon <strong>the</strong> request<br />
<strong>of</strong> any Participating Country.<br />
5. <strong>The</strong> Management Committee, acting by majority, shall elect its<br />
Chairman and Vice-Chairmen.<br />
STANDING GROUPS<br />
Article 54<br />
1. Each Standing Group shall be composed <strong>of</strong> one or more<br />
representatives <strong>of</strong> <strong>the</strong> Government <strong>of</strong> each Participating Country.<br />
2. <strong>The</strong> Management Committee, acting by majority, shall elect <strong>the</strong><br />
Chairmen and Vice-Chairmen <strong>of</strong> <strong>the</strong> Standing Groups.<br />
Article 55<br />
1. <strong>The</strong> Standing Group on Emergency Questions shall carry out <strong>the</strong><br />
functions assigned to it in Chapters I to V and <strong>the</strong> Annex and any o<strong>the</strong>r<br />
function delegated to it by <strong>the</strong> Governing Board.<br />
2. <strong>The</strong> Standing Group may review and report to <strong>the</strong> Management<br />
Committee on any matter within <strong>the</strong> scope <strong>of</strong> Chapters I to IV and <strong>the</strong> Annex.<br />
3. <strong>The</strong> Standing Group may consult with oil companies on any<br />
matter within its competence.<br />
Article 56<br />
1. <strong>The</strong> Standing Group on <strong>the</strong> Oil Market shall carry out <strong>the</strong><br />
functions assigned to it in Chapters V and VI and any o<strong>the</strong>r function<br />
delegated to it by <strong>the</strong> Governing Board.<br />
385
2. <strong>The</strong> Standing Group may review and report to <strong>the</strong> Management<br />
Committee on any matter within <strong>the</strong> scope <strong>of</strong> Chapters V and VI.<br />
3. <strong>The</strong> Standing Group may consult with oil companies on any<br />
matter within its competence.<br />
Article 57<br />
1. <strong>The</strong> Standing Group on Long Term Co-operation shall carry out<br />
<strong>the</strong> functions assigned to it in Chapter VII and any o<strong>the</strong>r function delegated<br />
to it by <strong>the</strong> Governing Board.<br />
2. <strong>The</strong> Standing Group may review and report to <strong>the</strong> Management<br />
Committee on any matter within <strong>the</strong> scope <strong>of</strong> Chapter VII.<br />
Article 58<br />
1. <strong>The</strong> Standing Group on Relations with Producer and o<strong>the</strong>r<br />
Consumer Countries shall carry out <strong>the</strong> functions assigned to it in Chapter VIII<br />
and any o<strong>the</strong>r function delegated to it by <strong>the</strong> Governing Board.<br />
2. <strong>The</strong> Standing Group may review and report to <strong>the</strong> Management<br />
Committee on any matter within <strong>the</strong> scope <strong>of</strong> Chapter VIII.<br />
3. <strong>The</strong> Standing Group may consult with oil companies on any<br />
matter within its competence.<br />
SECRETARIAT<br />
Article 59<br />
1. <strong>The</strong> Secretariat shall be composed <strong>of</strong> an Executive Director and<br />
such staff as is necessary.<br />
2. <strong>The</strong> Executive Director shall be appointed by <strong>the</strong> Governing Board.<br />
386
3. In <strong>the</strong> performance <strong>of</strong> <strong>the</strong>ir duties under this Agreement <strong>the</strong><br />
Executive Director and <strong>the</strong> staff shall be responsible to and report to <strong>the</strong><br />
organs <strong>of</strong> <strong>the</strong> Agency.<br />
4. <strong>The</strong> Governing Board, acting by majority, shall take all decisions<br />
necessary for <strong>the</strong> establishment and <strong>the</strong> functioning <strong>of</strong> <strong>the</strong> Secretariat.<br />
Article 60<br />
<strong>The</strong> Secretariat shall carry out <strong>the</strong> functions assigned to it in this<br />
Agreement and any o<strong>the</strong>r function assigned to it by <strong>the</strong> Governing Board.<br />
VOTING<br />
Article 61<br />
1. <strong>The</strong> Governing Board shall adopt decisions and recommendations<br />
for which no express voting provision is made in this Agreement, as follows:<br />
(a) by majority:<br />
– decisions on <strong>the</strong> management <strong>of</strong> <strong>the</strong> Program, including<br />
decisions applying provisions <strong>of</strong> this Agreement which<br />
already impose specific obligations on Participating Countries<br />
– decisions on procedural questions<br />
– recommendations<br />
(b) by unanimity:<br />
– all o<strong>the</strong>r decisions, including in particular decisions which<br />
impose on Participating Countries new obligations not<br />
already specified in this Agreement.<br />
2. Decisions mentioned in paragraph 1 (b) may provide:<br />
(a) that <strong>the</strong>y shall not be binding on one or more Participating<br />
Countries;<br />
(b) that <strong>the</strong>y shall be binding only under certain conditions.<br />
387
Article 62<br />
1. Unanimity shall require all <strong>of</strong> <strong>the</strong> votes <strong>of</strong> <strong>the</strong> Participating Countries<br />
present and voting. Countries abstaining shall be considered as not voting.<br />
2. When majority or special majority is required, <strong>the</strong> Participating<br />
Countries shall have <strong>the</strong> following voting weights:<br />
General<br />
voting<br />
weights<br />
Oil<br />
Consumption<br />
voting<br />
weights<br />
Combined<br />
voting<br />
weights<br />
Australia<br />
Austria<br />
Belgium<br />
Canada<br />
Denmark<br />
Finland<br />
France<br />
Germany<br />
Greece<br />
Ireland<br />
Italy<br />
Japan<br />
Luxembourg<br />
<strong>The</strong> Ne<strong>the</strong>rlands<br />
New Zealand<br />
Portugal<br />
Spain<br />
Sweden<br />
Switzerland<br />
Turkey<br />
United Kingdom<br />
United States<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
3<br />
1<br />
1<br />
1<br />
5<br />
1<br />
1<br />
6<br />
8<br />
0<br />
0<br />
5<br />
14<br />
0<br />
1<br />
0<br />
0<br />
2<br />
2<br />
1<br />
1<br />
6<br />
44<br />
4<br />
4<br />
4<br />
8<br />
4<br />
4<br />
9<br />
11<br />
3<br />
3<br />
8<br />
17<br />
3<br />
4<br />
3<br />
3<br />
5<br />
5<br />
4<br />
4<br />
9<br />
47<br />
Totals<br />
66<br />
100<br />
166<br />
388
3. Majority shall require 60 per cent <strong>of</strong> <strong>the</strong> total combined voting<br />
weights and 50 per cent <strong>of</strong> <strong>the</strong> general voting weights cast.<br />
4. Special majority shall require:<br />
(a) 60 per cent <strong>of</strong> <strong>the</strong> total combined voting weights and<br />
50 general voting weights for:<br />
– <strong>the</strong> decision under Article 2, paragraph 2, relating to <strong>the</strong><br />
increase in <strong>the</strong> emergency reserve commitment;<br />
– decisions under Article 19, paragraph 3, not to activate<br />
<strong>the</strong> emergency measures referred to in Articles 13 and 14;<br />
– decisions under Article <strong>20</strong>, paragraph 3, on <strong>the</strong> measures<br />
required for meeting <strong>the</strong> necessities <strong>of</strong> <strong>the</strong> situation;<br />
– decisions under Article 23, paragraph 3, to maintain <strong>the</strong><br />
emergency measures referred to in Articles 13 and 14;<br />
– decisions under Article 24 to deactivate <strong>the</strong> emergency<br />
measures referred to in Articles 13 and 14.<br />
(b) 57 general voting weights for:<br />
– decisions under Article 19, paragraph 3, not to activate<br />
<strong>the</strong> emergency measures referred to in Article 17;<br />
– decisions under Article 23, paragraph 3, to maintain <strong>the</strong><br />
emergency measures referred to in Article 17;<br />
– decisions under Article 24 to deactivate <strong>the</strong> emergency<br />
measures referred to in Article 17.<br />
5. <strong>The</strong> Governing Board, acting by unanimity, shall decide on <strong>the</strong><br />
necessary increase, decrease, and redistribution <strong>of</strong> <strong>the</strong> voting weights<br />
referred to in paragraph 2, as well as on amendment <strong>of</strong> <strong>the</strong> voting<br />
requirements set out in paragraphs 3 and 4 in <strong>the</strong> event that<br />
– a Country accedes to this Agreement in accordance with<br />
Article 71, or<br />
– a Country withdraws from this Agreement in accordance with<br />
Article 68, paragraph 2, or Article 69, paragraph 2.<br />
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6. <strong>The</strong> Governing Board shall review annually <strong>the</strong> number and<br />
distribution <strong>of</strong> voting weights specified in paragraph 2, and, on <strong>the</strong> basis <strong>of</strong><br />
such review, acting by unanimity, shall decide whe<strong>the</strong>r such voting weights<br />
should be increased or decreased, or redistributed, or both, because a<br />
change in any Participating Country’s share in total oil consumption has<br />
occurred or for any o<strong>the</strong>r reason.<br />
7. Any change in paragraph 2, 3 or 4 shall be based on <strong>the</strong> concepts<br />
underlying those paragraphs and paragraph 6.<br />
RELATIONS WITH OTHER ENTITIES<br />
Article 63<br />
In order to achieve <strong>the</strong> objectives <strong>of</strong> <strong>the</strong> Program, <strong>the</strong> Agency may<br />
establish appropriate relations with non-participating countries,<br />
international organisations, whe<strong>the</strong>r governmental or non-governmental,<br />
o<strong>the</strong>r entities and individuals.<br />
FINANCIAL ARRANGEMENTS<br />
Article 64<br />
1. <strong>The</strong> expenses <strong>of</strong> <strong>the</strong> Secretariat and all o<strong>the</strong>r common expenses<br />
shall be shared among all Participating Countries according to a scale <strong>of</strong><br />
contributions elaborated according to <strong>the</strong> principles and rules set out in <strong>the</strong><br />
Annex to <strong>the</strong> “OECD Resolution <strong>of</strong> <strong>the</strong> Council on Determination <strong>of</strong> <strong>the</strong><br />
Scale <strong>of</strong> Contributions by Member Countries to <strong>the</strong> Budget <strong>of</strong> <strong>the</strong><br />
Organisation” <strong>of</strong> 10th December, 1963. After <strong>the</strong> first year <strong>of</strong> application <strong>of</strong><br />
this Agreement, <strong>the</strong> Governing Board shall review this scale <strong>of</strong> contributions<br />
and, acting by unanimity, shall decide upon any appropriate changes in<br />
accordance with Article 73.<br />
2. Special expenses incurred in connection with special activities<br />
carried out pursuant to Article 65 shall be shared by <strong>the</strong> Participating<br />
Countries taking part in such special activities in such proportions as shall<br />
be determined by unanimous agreement between <strong>the</strong>m.<br />
390
3. <strong>The</strong> Executive Director shall, in accordance with <strong>the</strong> financial<br />
regulations adopted by <strong>the</strong> Governing Board and not later than 1st October<br />
<strong>of</strong> each year, submit to <strong>the</strong> Governing Board a draft budget including<br />
personnel requirements. <strong>The</strong> Governing Board, acting by majority, shall<br />
adopt <strong>the</strong> budget.<br />
4. <strong>The</strong> Governing Board, acting by majority, shall take all o<strong>the</strong>r<br />
necessary decisions regarding <strong>the</strong> financial administration <strong>of</strong> <strong>the</strong> Agency.<br />
5. <strong>The</strong> financial year shall begin on 1st January and end on<br />
31st December <strong>of</strong> each year. At <strong>the</strong> end <strong>of</strong> each financial year, revenues and<br />
expenditures shall be submitted to audit.<br />
SPECIAL ACTIVITIES<br />
Article 65<br />
1. Any two or more Participating Countries may decide to carry out<br />
within <strong>the</strong> scope <strong>of</strong> this Agreement special activities, o<strong>the</strong>r than activities<br />
which are required to be carried out by all Participating Countries under<br />
Chapters I to V. Participating Countries which do not wish to take part in<br />
such special activities shall abstain from taking part in such decisions and<br />
shall not be bound by <strong>the</strong>m. Participating Countries carrying out such<br />
activities shall keep <strong>the</strong> Governing Board informed <strong>the</strong>re<strong>of</strong>.<br />
2. For <strong>the</strong> implementation <strong>of</strong> such special activities, <strong>the</strong> Participating<br />
Countries concerned may agree upon voting procedures o<strong>the</strong>r than<br />
those provided for in Articles 61 and 62.<br />
IMPLEMENTATION OF THE AGREEMENT<br />
Article 66<br />
Each Participating Country shall take <strong>the</strong> necessary measures,<br />
including any necessary legislative measures, to implement this Agreement<br />
and decisions taken by <strong>the</strong> Governing Board.<br />
391
Chapter X<br />
FINAL PROVISIONS<br />
Article 67<br />
1. Each Signatory State shall, not later than 1st May, 1975, notify<br />
<strong>the</strong> Government <strong>of</strong> Belgium that, having complied with its constitutional<br />
procedures, it consents to be bound by this Agreement.<br />
2. On <strong>the</strong> tenth day following <strong>the</strong> day on which at least six States<br />
holding at least 60 per cent <strong>of</strong> <strong>the</strong> combined voting weights mentioned in<br />
Article 62 have deposited a notification <strong>of</strong> consent to be bound or an<br />
instrument <strong>of</strong> accession, this Agreement shall enter into force for such States.<br />
3. For each Signatory State which deposits its notification<br />
<strong>the</strong>reafter, this Agreement shall enter into force on <strong>the</strong> tenth day following<br />
<strong>the</strong> day <strong>of</strong> deposit.<br />
4. <strong>The</strong> Governing Board, acting by majority, may upon request<br />
from any Signatory State decide to extend, with respect to that State, <strong>the</strong><br />
time limit for notification beyond 1st May, 1975.<br />
Article 68<br />
1. Notwithstanding <strong>the</strong> provisions <strong>of</strong> Article 67, this Agreement<br />
shall be applied provisionally by all Signatory States, to <strong>the</strong> extent possible<br />
not inconsistent with <strong>the</strong>ir legislation, as from 18th November, <strong>1974</strong><br />
following <strong>the</strong> first meeting <strong>of</strong> <strong>the</strong> Governing Board.<br />
2. Provisional application <strong>of</strong> <strong>the</strong> Agreement shall continue until:<br />
– <strong>the</strong> Agreement enters into force for <strong>the</strong> State concerned in<br />
accordance with Article 67, or<br />
– 60 days after <strong>the</strong> Government <strong>of</strong> Belgium receives notification that <strong>the</strong><br />
State concerned will not consent to be bound by <strong>the</strong> Agreement, or<br />
– <strong>the</strong> time limit for notification <strong>of</strong> consent by <strong>the</strong> State concerned<br />
referred to in Article 67 expires.<br />
392
Article 69<br />
1. This Agreement shall remain in force for a period <strong>of</strong> ten years from<br />
<strong>the</strong> date <strong>of</strong> its entry into force and shall continue in force <strong>the</strong>reafter unless and<br />
until <strong>the</strong> Governing Board, acting by majority, decides on its termination.<br />
2. Any Participating Country may terminate <strong>the</strong> application <strong>of</strong> this<br />
Agreement for its part upon twelve months’ written notice to <strong>the</strong><br />
Government <strong>of</strong> Belgium to that effect, given not less than three years after<br />
<strong>the</strong> first day <strong>of</strong> <strong>the</strong> provisional application <strong>of</strong> this Agreement.<br />
Article 70<br />
1. Any State may, at <strong>the</strong> time <strong>of</strong> signature, notification <strong>of</strong> consent to<br />
be bound in accordance with Article 67, accession or at any later date,<br />
declare by notification addressed to <strong>the</strong> Government <strong>of</strong> Belgium that this<br />
Agreement shall apply to all or any <strong>of</strong> <strong>the</strong> territories for whose international<br />
relations it is responsible, or to any territories within its frontiers for whose<br />
oil supplies it is legally responsible.<br />
2. Any declaration made pursuant to paragraph 1 may, in respect <strong>of</strong><br />
any territory mentioned in such declaration, be withdrawn in accordance<br />
with <strong>the</strong> provisions <strong>of</strong> Article 69, paragraph 2.<br />
Article 71<br />
1. This Agreement shall be open for accession by any Member <strong>of</strong> <strong>the</strong><br />
Organisation for Economic Co-operation and Development which is able<br />
and willing to meet <strong>the</strong> requirements <strong>of</strong> <strong>the</strong> Program. <strong>The</strong> Governing Board,<br />
acting by majority, shall decide on any request for accession.<br />
2. This Agreement shall enter into force for any State whose request for<br />
accession has been granted on <strong>the</strong> tenth day following <strong>the</strong> deposit <strong>of</strong> its instrument<br />
<strong>of</strong> accession with <strong>the</strong> Government <strong>of</strong> Belgium, or on <strong>the</strong> date <strong>of</strong> entry into force <strong>of</strong><br />
<strong>the</strong> Agreement pursuant to Article 67, paragraph 2, whichever is <strong>the</strong> later.<br />
3. Accession may take place on a provisional basis under <strong>the</strong><br />
conditions set out in Article 68, subject to such time limits as <strong>the</strong> Governing<br />
393
Board, acting by majority, may fix for an acceding State to deposit its<br />
notification <strong>of</strong> consent to be bound.<br />
Article 72<br />
1. This Agreement shall be open for accession by <strong>the</strong> European<br />
Communities.<br />
2. This Agreement shall not in any way impede <strong>the</strong> fur<strong>the</strong>r<br />
implementation <strong>of</strong> <strong>the</strong> treaties establishing <strong>the</strong> European Communities.<br />
Article 73<br />
This Agreement may at any time be amended by <strong>the</strong> Governing<br />
Board, acting by unanimity. Such amendment shall come into force in a<br />
manner determined by <strong>the</strong> Governing Board, acting by unanimity and<br />
making provision for Participating Countries to comply with <strong>the</strong>ir respective<br />
constitutional procedures.<br />
Article 74<br />
This Agreement shall be subject to a general review after 1st May, 1980.<br />
Article 75<br />
<strong>The</strong> Government <strong>of</strong> Belgium shall notify all Participating Countries <strong>of</strong><br />
<strong>the</strong> deposit <strong>of</strong> each notification <strong>of</strong> consent to be bound in accordance with<br />
Article 67, and <strong>of</strong> each instrument <strong>of</strong> accession, <strong>of</strong> <strong>the</strong> entry into force <strong>of</strong><br />
this Agreement or any amendment <strong>the</strong>reto, <strong>of</strong> any denunciation <strong>the</strong>re<strong>of</strong>, and<br />
<strong>of</strong> any o<strong>the</strong>r declaration or notification received.<br />
Article 76<br />
<strong>The</strong> original <strong>of</strong> this Agreement, <strong>of</strong> which <strong>the</strong> English, French and<br />
German texts are equally au<strong>the</strong>ntic, shall be deposited with <strong>the</strong> Government<br />
<strong>of</strong> Belgium, and a certified copy <strong>the</strong>re<strong>of</strong> shall be furnished to each o<strong>the</strong>r<br />
Participating country by <strong>the</strong> Government <strong>of</strong> Belgium.<br />
394
IN WITNESS WHEREOF <strong>the</strong> undersigned, being duly authorised <strong>the</strong>reto<br />
by <strong>the</strong>ir respective Governments, have signed this Agreement.<br />
DONE at Paris, this eighteenth day <strong>of</strong> November, Nineteen Hundred<br />
and Seventy Four.<br />
EN FOI DE QUOI, les soussignés, dûment autorisés à cet effet par leurs<br />
Gouvernements respectifs, ont signé le présent Accord.<br />
FAIT à Paris, le dix-huit novembre mil neuf cent soixante-quatorze.<br />
ZU URKUND DESSEN haben die hierzu von ihren Regierungen gehörig<br />
befugten Unterzeichneten dieses Übereinkommen unterschrieben.<br />
GESCHEHEN ZU Paris, am 18. November <strong>1974</strong>.<br />
For <strong>the</strong> REPUBLIC OF AUSTRIA:<br />
Pour la RÉPUBLIQUE D’AUTRICHE:<br />
Für die REPUBLIK ÖSTERREICH:<br />
For <strong>the</strong> KINGDOM OF BELGIUM:<br />
Pour le ROYAUME DE BELGIQUE:<br />
Für das KÖNIGREICH BELGIEN:<br />
For CANADA:<br />
Pour le CANADA:<br />
Für KANADA:<br />
For <strong>the</strong> KINGDOM OF DENMARK:<br />
Pour le ROYAUME DE DANEMARK:<br />
Für das KÖNIGREICH DÄNEMARK:<br />
For <strong>the</strong> FEDERAL REPUBLIC OF GERMANY:<br />
Pour la RÉPUBLIQUE FÉDÉRALE D’ALLEMAGNE:<br />
Für die BUNDESREPUBLIK DEUTSCHLAND:<br />
Dr. GEORG SEYFFERTITZ<br />
E. DAVIGNON<br />
P. M. TOWE<br />
JENS CHRISTENSEN<br />
E. EMMEL<br />
ROHWEDDER<br />
395
For IRELAND:<br />
Pour l’IRLANDE:<br />
Für IRLAND:<br />
EAMONN GALLAGHER<br />
For <strong>the</strong> ITALIAN REPUBLIC:<br />
Pour la RÉPUBLIQUE ITALIENNE:<br />
Für die ITALIENISCHE REPUBLIK:<br />
CESIDIO GUAZZARONI<br />
For JAPAN:<br />
Pour le JAPON:<br />
Für JAPAN:<br />
BUNROKU YOSHINO<br />
For <strong>the</strong> GRAND DUCHY OF LUXEMBOURG:<br />
Pour le GRAND DUCHÉ DE LUXEMBOURG:<br />
Für das GROSSHERZOGTUM LUXEMBURG:<br />
For <strong>the</strong> KINGDOM OF THE NETHERLANDS:<br />
Pour le ROYAUME DES PAYS-BAS:<br />
Für das KÖNIGREICH DER NIEDERLANDE:<br />
REICHLING<br />
F. ITALIANER<br />
K. WESTERHOFF<br />
For SPAIN:<br />
Pour l’ESPAGNE:<br />
Für SPANIEN:<br />
Marquis de NERVA<br />
For <strong>the</strong> KINGDOM OF SWEDEN:<br />
Pour le ROYAUME DE SUÈDE:<br />
Für das KÖNIGREICH SCHWEDEN:<br />
For <strong>the</strong> SWISS CONFEDERATION:<br />
Pour la CONFÉDÉRATION SUISSE:<br />
Für die SCHWEIZERISCHE EIDGENOSSENSCHAFT:<br />
For <strong>the</strong> REPUBLIC OF TURKEY:<br />
Pour la RÉPUBLIQUE DE TURQUIE:<br />
Für die REPUBLIK TÜRKEI:<br />
HANS V. EWERLÖF<br />
P. LANGUETIN<br />
MEMDUH AYTÜR<br />
396
For <strong>the</strong> UNITED KINGDOM OF GREAT BRITAIN<br />
AND NORTHERN IRELAND:<br />
Pour le ROYAUME-UNI DE GRANDE-BRETAGNE<br />
ET L’IRLANDE DU NORD:<br />
LEONARD WILLIAMS<br />
Für das VEREINIGTE KÖNIGREICH VON<br />
GROSSBRITANNIEN UND NORDIRLAND:<br />
For <strong>the</strong> UNITED STATES OF AMERICA:<br />
Pour les ETATS-UNIS D’AMÉRIQUE:<br />
Für die VEREINIGTEN STAATEN VON AMERIKA:<br />
THOMAS O. ENDERS<br />
397
ANNEX<br />
EMERGENCY RESERVES<br />
Article 1<br />
1. Total oil stocks are measured according to <strong>the</strong> OECD and EEC<br />
definitions, revised as follows:<br />
A. Stocks included:<br />
crude oil, major products and unfinished oil held<br />
– in refinery tanks<br />
– in bulk terminals<br />
– in pipeline tankage<br />
– in barges<br />
– in intercoastal tankers<br />
– in oil tankers in port<br />
– in inland ship bunkers<br />
– in storage tank bottoms<br />
– in working stocks<br />
– by large consumers as required by law or o<strong>the</strong>rwise<br />
controlled by Governments.<br />
B. Stocks excluded:<br />
(a) crude oil not yet produced<br />
399
(b) crude oil, major products and unfinished oils held<br />
– in pipelines<br />
– in rail tank cars<br />
– in truck tank cars<br />
– in seagoing ships’ bunkers<br />
– in service stations and retail stores<br />
– by o<strong>the</strong>r consumers<br />
– in tankers at sea<br />
– as military stocks.<br />
2. That portion <strong>of</strong> oil stocks which can be credited toward each<br />
Participating country’s emergency reserve commitment is its total oil stocks<br />
under <strong>the</strong> above definition minus those stocks which can be technically<br />
determined as being absolutely unavailable in even <strong>the</strong> most severe emergency.<br />
<strong>The</strong> Standing Group on Emergency Questions shall examine this concept and<br />
report on criteria for <strong>the</strong> measurement <strong>of</strong> absolutely unavailable stocks.<br />
3. Until a decision has been taken on this matter, each Participating<br />
Country shall subtract 10 per cent from its total stocks in measuring its<br />
emergency reserves.<br />
4. <strong>The</strong> Standing Group on Emergency Questions shall examine and<br />
report to <strong>the</strong> Management Committee on:<br />
(a) <strong>the</strong> modalities <strong>of</strong> including naphtha for uses o<strong>the</strong>r than motor<br />
and aviation gasoline in <strong>the</strong> consumption against which<br />
stocks are measured,<br />
(b) <strong>the</strong> possibility <strong>of</strong> creating common rules for <strong>the</strong> treatment <strong>of</strong><br />
marine bunders in a emergency, and <strong>of</strong> including marine<br />
bunders in <strong>the</strong> consumption against which stocks are<br />
measured,<br />
400
(c) <strong>the</strong> possibility <strong>of</strong> creating common rules concerning demand<br />
restraint for aviation bunkers,<br />
(d) <strong>the</strong> possibility <strong>of</strong> crediting towards emergency reserve<br />
commitments some portion <strong>of</strong> oil at sea at <strong>the</strong> time <strong>of</strong> activatiron<br />
<strong>of</strong> emergency measures,<br />
(e) <strong>the</strong> possibility <strong>of</strong> increasing supplies available in an emergency<br />
through savings in <strong>the</strong> distribution system.<br />
Article 2<br />
1. Fuel switching capacity is defined as normal oil consumption that<br />
may be replaced by o<strong>the</strong>r fuels in an emergency, provided that this capacity<br />
is subject to government control in an emergency, can be brought into<br />
operation within one month, and that secure supplies <strong>of</strong> <strong>the</strong> alternative fuel<br />
are available for use.<br />
2. <strong>The</strong> supply <strong>of</strong> alternative fuel shall be expressed in terms <strong>of</strong> oil<br />
equivalent.<br />
3. Stocks <strong>of</strong> an alternative fuel reserved for fuel switching purposes<br />
may be credited towards emergency reserve commitments ins<strong>of</strong>ar as <strong>the</strong>y<br />
can be used during <strong>the</strong> period <strong>of</strong> self-sufficiency.<br />
4. Stand-by production <strong>of</strong> an alternative fuel reserved for fuel<br />
switching purposes will be credited towards emergency reserve commitments<br />
on <strong>the</strong> same basis as stand-by oil production, subject to <strong>the</strong> provisions <strong>of</strong><br />
Article 4 <strong>of</strong> this Annex.<br />
5. <strong>The</strong> Standing Group on Emergency Questions shall examine and<br />
report to <strong>the</strong> Management Committee on<br />
(a) <strong>the</strong> appropriateness <strong>of</strong> <strong>the</strong> time limit <strong>of</strong> one month mentioned<br />
in paragraph 1,<br />
(b) <strong>the</strong> basis <strong>of</strong> accounting for <strong>the</strong> fuel switching capacity based<br />
on stocks <strong>of</strong> an alternative fuel, subject to <strong>the</strong> provisions <strong>of</strong><br />
paragraph 3.<br />
401
Article 3<br />
A Participating Country may credit towards its emergency reserve<br />
commitment oil stocks in ano<strong>the</strong>r country provided that <strong>the</strong> Government <strong>of</strong><br />
that o<strong>the</strong>r country has an agreement with <strong>the</strong> government <strong>of</strong> <strong>the</strong><br />
Participating Country that it shall impose no impediment to <strong>the</strong> transfer <strong>of</strong><br />
those stocks in an emergency to <strong>the</strong> Participating Country.<br />
Article 4<br />
1. Stand-by oil production is defined as a Participating Country’s<br />
potential oil production in excess <strong>of</strong> normal oil production within its jurisdiction<br />
– which is subject to governement control, and<br />
– which can be brought into use during an emergency within<br />
<strong>the</strong> period <strong>of</strong> self-sufficiency.<br />
2. <strong>The</strong> Standing Group on Emergency Questions shall examine and<br />
report to <strong>the</strong> Management Committee on<br />
(a) <strong>the</strong> concept <strong>of</strong> and methods <strong>of</strong> measurement <strong>of</strong> stand-by oil<br />
production as referred to in paragraph 1,<br />
(b) <strong>the</strong> appropriateness <strong>of</strong> “<strong>the</strong> period <strong>of</strong> self-sufficiency” as a<br />
time limit,<br />
(c) <strong>the</strong> question <strong>of</strong> whe<strong>the</strong>r a given quantity <strong>of</strong> stand-by oil production<br />
is <strong>of</strong> greater value for purposes <strong>of</strong> emergency self-sufficiency<br />
than <strong>the</strong> same quantity <strong>of</strong> oil stocks, <strong>the</strong> amount <strong>of</strong> a possible<br />
credit for stand-by production, and <strong>the</strong> method <strong>of</strong> its calculation.<br />
Article 5<br />
Stand-by oil production available to a Participating Country within<br />
<strong>the</strong> jurisdiction <strong>of</strong> ano<strong>the</strong>r country may be credited towards its emergency<br />
reserve commitment on <strong>the</strong> same basis as stand-by oil production within it<br />
own jurisdiction, subject to <strong>the</strong> provisions <strong>of</strong> Article 4 <strong>of</strong> this Annex<br />
provided that <strong>the</strong> Government <strong>of</strong> that o<strong>the</strong>r country has an agreement with<br />
402
<strong>the</strong> Government <strong>of</strong> <strong>the</strong> Participating Country that it shall impose no<br />
impediment to <strong>the</strong> supply <strong>of</strong> oil from that stand-by capacity to <strong>the</strong><br />
Participating Country in an emergency.<br />
Article 6<br />
<strong>The</strong> Standing Group on Emergency Questions shall examine and report<br />
to <strong>the</strong> Management Committee on <strong>the</strong> possibility <strong>of</strong> crediting towards a<br />
Participating Country’s emergency reserve commitment mentioned in Article<br />
2, paragraph 2, <strong>of</strong> <strong>the</strong> Agreement, long term investments which have <strong>the</strong><br />
effect <strong>of</strong> reducing <strong>the</strong> Participating Countries’ dependence on imported oil.<br />
Article 7<br />
1. <strong>The</strong> Standing Group on Emergency Questions shall examine and<br />
report to <strong>the</strong> Management Committee regarding <strong>the</strong> reference period set out in<br />
Article 2, paragraph 1, <strong>of</strong> <strong>the</strong> Agreement, in particular taking into account such<br />
factors as growth, seasonal variations in consumption and cyclical changes.<br />
2. A decision by <strong>the</strong> Governing Board to change <strong>the</strong> definition <strong>of</strong> <strong>the</strong><br />
reference period mentioned in paragraph 1 shall be taken by unanimity.<br />
Article 8<br />
<strong>The</strong> Standing Group on Emergency Questions shall examine and<br />
report to <strong>the</strong> Management Committee on all elements <strong>of</strong> Chapters I to IV <strong>of</strong><br />
<strong>the</strong> Agreement to eliminate possible ma<strong>the</strong>matical and statistical anomalies.<br />
Article 9<br />
<strong>The</strong> reports from <strong>the</strong> Standing Group on Emergency Questions on <strong>the</strong><br />
matters mentioned in this Annex shall be submitted to <strong>the</strong> Management<br />
Committee by 1st April, 1975. <strong>The</strong> Management Committee shall make<br />
proposals, as appropriate, to <strong>the</strong> Governing Board, which, acting by<br />
majority, not later than 1st July, 1975, shall decide on <strong>the</strong>se proposals<br />
except as provided for in Article 7, paragraph 2, <strong>of</strong> this Annex.<br />
403
APPENDIX IV<br />
OECD Council Decision on<br />
<strong>the</strong> Establishment <strong>of</strong> <strong>the</strong> Agency<br />
(Adopted on 15 November <strong>1974</strong>)<br />
<strong>The</strong> Council,<br />
Having regard to <strong>the</strong> Convention on <strong>the</strong> Organisation for Economic<br />
Co-operation and Development <strong>of</strong> 14th December, 1960 (hereinafter called<br />
<strong>the</strong> “Convention”) and, in particular, Articles 5(a), 6, 9, 12, 13 and <strong>20</strong> <strong>of</strong><br />
<strong>the</strong> Convention;<br />
Having regard to <strong>the</strong> Financial Regulations <strong>of</strong> <strong>the</strong> Organisation and,<br />
in particular, to Articles 5, 10, 14(b) and 16(b) <strong>the</strong>re<strong>of</strong>;<br />
Having regard to <strong>the</strong> Regulations, Rules and Instructions for Council<br />
Experts and Consultants <strong>of</strong> <strong>the</strong> Organisation;<br />
Noting that <strong>the</strong> Governments <strong>of</strong> certain Member countries have<br />
declared <strong>the</strong>ir intention to enter into a separate Agreement on an International<br />
Energy Program which is attached to document C(74)<strong>20</strong>4 <strong>of</strong> 6th<br />
November, <strong>1974</strong>, and Corrigendum 1 <strong>the</strong>reto, which is circulated for<br />
reference and is hereinafter referred to as <strong>the</strong> “Agreement”;<br />
Having regard to <strong>the</strong> Recommendation <strong>of</strong> <strong>the</strong> Council <strong>of</strong> 29th June,<br />
1971 on Oil Stockpiling [C(71)113(Final)];<br />
Having regard to <strong>the</strong> Decision <strong>of</strong> <strong>the</strong> Council <strong>of</strong> 14th November, 1972<br />
on Emergency Plans and Measures and Apportionment <strong>of</strong> Oil Supplies in an<br />
Emergency in <strong>the</strong> OECD European Area [C(72)<strong>20</strong>1(Final)];<br />
Having regard to <strong>the</strong> Recommendation <strong>of</strong> <strong>the</strong> Council <strong>of</strong> 10th<br />
January, <strong>1974</strong> on <strong>the</strong> Supply <strong>of</strong> Bunker Fuels for Shipping and Fishing<br />
[C(73)257(Final)];<br />
405
Having regard to <strong>the</strong> Recommendation <strong>of</strong> <strong>the</strong> Council <strong>of</strong> 10th<br />
January, <strong>1974</strong> on <strong>the</strong> Supply <strong>of</strong> Fuel for Civil Aircraft [C(73)258<br />
(Final)];<br />
Having regard to <strong>the</strong> Note by <strong>the</strong> Secretary-General <strong>of</strong> 6th November,<br />
<strong>1974</strong> concerning <strong>the</strong> International Energy Program [C(74)<strong>20</strong>3 and<br />
Corrigendum 1];<br />
DECIDES:<br />
Article 1<br />
An International Energy Agency (hereinafter called <strong>the</strong> “Agency”) is<br />
hereby established as an autonomous body within <strong>the</strong> framework <strong>of</strong> <strong>the</strong><br />
Organisation.<br />
Article 2<br />
Participating Countries <strong>of</strong> <strong>the</strong> Agency are:<br />
(a) Austria, Belgium, Canada, Denmark, Germany, Ireland, Italy,<br />
Japan, Luxembourg, <strong>the</strong> Ne<strong>the</strong>rlands, Spain, Sweden, Switzerland, Turkey,<br />
<strong>the</strong> United Kingdom and <strong>the</strong> United States;<br />
(b) o<strong>the</strong>r Member countries <strong>of</strong> <strong>the</strong> Organisation which accede to this<br />
Decision and to <strong>the</strong> Agreement in accordance with its terms.<br />
Article 3<br />
This Decision will be open for accession by <strong>the</strong> European Communities<br />
upon <strong>the</strong>ir accession to <strong>the</strong> Agreement in accordance with its terms.<br />
Article 4<br />
A Governing Board composed <strong>of</strong> all <strong>the</strong> Participating Countries <strong>of</strong><br />
<strong>the</strong> Agency shall be <strong>the</strong> body from which all acts <strong>of</strong> <strong>the</strong> Agency derive,<br />
and shall have <strong>the</strong> power to make recommendations and to take<br />
decisions which shall, except as o<strong>the</strong>rwise provided, be binding upon<br />
Participating Countries, and to delegate its powers to o<strong>the</strong>r organs <strong>of</strong> <strong>the</strong><br />
Agency. <strong>The</strong> Governing Board shall adopt its own rules <strong>of</strong> procedure and<br />
voting rules.<br />
406
Article 5<br />
<strong>The</strong> Governing Board shall establish such organs and procedures as<br />
may be required for <strong>the</strong> proper functioning <strong>of</strong> <strong>the</strong> Agency.<br />
Article 6<br />
(a) <strong>The</strong> Governing Board shall decide upon and carry out an<br />
International Energy Program for co-operation in <strong>the</strong> field <strong>of</strong> energy, <strong>the</strong><br />
aims <strong>of</strong> which are:<br />
(i) development <strong>of</strong> a common level <strong>of</strong> emergency self-sufficiency in<br />
oil supplies;<br />
(ii) establishment <strong>of</strong> common demand restraint measures in an<br />
emergency;<br />
(iii) establishment and implementation <strong>of</strong> measures for <strong>the</strong> allocation<br />
<strong>of</strong> available oil in time <strong>of</strong> emergency;<br />
(iv) development <strong>of</strong> a system <strong>of</strong> information on <strong>the</strong> international oil market<br />
and a framework for consultation with international oil companies;<br />
(v) development and implementation <strong>of</strong> a long-term co-operation<br />
programme to reduce dependence on imported oil, including:<br />
conservation <strong>of</strong> energy, development <strong>of</strong> alternative sources <strong>of</strong><br />
energy, energy research and development, and supply <strong>of</strong> natural<br />
and enriched uranium;<br />
(vi) promotion <strong>of</strong> co-operative relations with oil producing countries<br />
and with o<strong>the</strong>r oil consuming countries, particularly those <strong>of</strong> <strong>the</strong><br />
developing world.<br />
<strong>The</strong> Governing Board may adopt o<strong>the</strong>r measures <strong>of</strong> co-operation in <strong>the</strong><br />
energy field which it may deem necessary and o<strong>the</strong>rwise amend <strong>the</strong><br />
Program by unanimity, taking into account <strong>the</strong> constitutional procedures <strong>of</strong><br />
<strong>the</strong> Participating Countries.<br />
(b) Upon <strong>the</strong> proposal <strong>of</strong> <strong>the</strong> Governing Board <strong>of</strong> <strong>the</strong> Agency <strong>the</strong><br />
Council may confer additional responsibilities upon <strong>the</strong> Agency.<br />
407
Article 7<br />
(a) <strong>The</strong> organs <strong>of</strong> <strong>the</strong> Agency shall be assisted by an Executive Director<br />
and such staff as is necessary who shall form part <strong>of</strong> <strong>the</strong> Secretariat <strong>of</strong> <strong>the</strong><br />
Organisation and who shall, in performing <strong>the</strong>ir duties under <strong>the</strong> International<br />
Energy Program, be responsible to and report to <strong>the</strong> organs <strong>of</strong> <strong>the</strong> Agency.<br />
(b) <strong>The</strong> Executive Director shall be appointed by <strong>the</strong> Governing<br />
Board on <strong>the</strong> proposal or with concurrence <strong>of</strong> <strong>the</strong> Secretary-General.<br />
(c) Consultants to <strong>the</strong> Agency may be appointed for a period<br />
exceeding that provided in Regulation 2(b) <strong>of</strong> <strong>the</strong> Regulations and Rules for<br />
Council Experts and Consultants <strong>of</strong> <strong>the</strong> Organisation.<br />
Article 8<br />
<strong>The</strong> Governing Board shall report annually to <strong>the</strong> Council on <strong>the</strong><br />
activities <strong>of</strong> <strong>the</strong> Agency. <strong>The</strong> Governing Board shall submit, upon <strong>the</strong> request<br />
<strong>of</strong> <strong>the</strong> Council or upon its own initiative, o<strong>the</strong>r communications to <strong>the</strong> Council.<br />
Article 9<br />
<strong>The</strong> Agency shall co-operate with o<strong>the</strong>r competent bodies <strong>of</strong> <strong>the</strong><br />
Organisation in areas <strong>of</strong> common interest. <strong>The</strong>se bodies and <strong>the</strong> Agency<br />
shall consult with one ano<strong>the</strong>r regarding <strong>the</strong>ir respective activities.<br />
Article 10<br />
(a) <strong>The</strong> budget <strong>of</strong> <strong>the</strong> Agency shall form part <strong>of</strong> <strong>the</strong> Budget <strong>of</strong> <strong>the</strong><br />
Organisation and expenditure <strong>of</strong> <strong>the</strong> Agency shall be charged against <strong>the</strong><br />
appropriations authorised for it under Part II <strong>of</strong> <strong>the</strong> Budget which shall include<br />
appropriate Budget estimates and provisions for all expenditure necessary for<br />
<strong>the</strong> operation <strong>of</strong> <strong>the</strong> Agency. Each Participating Country’s share in financing<br />
such expenditure shall be fixed by <strong>the</strong> Governing Board. Special expenses<br />
incurred by <strong>the</strong> Agency in connection with activities referred to in Article 11<br />
shall be shared by <strong>the</strong> Participating Countries in such proportions as shall be<br />
determined by unanimous agreement <strong>of</strong> those countries. <strong>The</strong> Governing Board<br />
shall designate an organ <strong>of</strong> <strong>the</strong> Agency to advise <strong>the</strong> Governing Board as<br />
required on <strong>the</strong> financial administration <strong>of</strong> <strong>the</strong> Agency and to give its opinion<br />
on <strong>the</strong> annual and o<strong>the</strong>r budget proposals submitted to <strong>the</strong> Governing Board.<br />
408
(b) <strong>The</strong> Governing Board shall submit <strong>the</strong> annual and o<strong>the</strong>r budget<br />
proposals <strong>of</strong> <strong>the</strong> Agency to <strong>the</strong> Council for adoption by agreement <strong>of</strong> those<br />
Participating Countries <strong>of</strong> <strong>the</strong> Agency which voted in <strong>the</strong> Governing Board<br />
to submit <strong>the</strong> proposals to <strong>the</strong> Council.<br />
(c) Notwithstanding <strong>the</strong> provisions <strong>of</strong> Article 14(b) <strong>of</strong> <strong>the</strong> Financial<br />
Regulations, <strong>the</strong> Governing Board may accept voluntary contributions and<br />
grants as well as payments for services rendered by <strong>the</strong> Agency.<br />
(d) Notwithstanding <strong>the</strong> provisions <strong>of</strong> Article 16(b) <strong>of</strong> <strong>the</strong> Financial Regulations<br />
<strong>of</strong> <strong>the</strong> Organisation, appropriations in respect <strong>of</strong> <strong>the</strong> special activities<br />
referred to in Article 11 <strong>of</strong> this Decision, for which no commitment has been<br />
entered into before <strong>the</strong> end <strong>of</strong> <strong>the</strong> Financial Year for which <strong>the</strong>y were appropriated,<br />
shall be automatically carried forward to <strong>the</strong> budget for <strong>the</strong> ensuing year.<br />
Article 11<br />
Any two or more Participating Countries may decide to carry out<br />
within <strong>the</strong> scope <strong>of</strong> <strong>the</strong> Program special activities, o<strong>the</strong>r than activities<br />
which are required to be carried out by all Participating Countries under<br />
<strong>the</strong> Agreement. Participating Countries who do not wish to take part in<br />
such activities shall abstain from taking part in such decisions and shall not<br />
be bound by <strong>the</strong>m. Participating Countries carrying out such activities shall<br />
keep <strong>the</strong> Governing Board informed <strong>the</strong>re<strong>of</strong>.<br />
Article 12<br />
In order to achieve <strong>the</strong> objectives <strong>of</strong> <strong>the</strong> Program, <strong>the</strong> Agency may<br />
establish appropriate relationships with countries which are not<br />
Participating Countries, international organisations, whe<strong>the</strong>r Governmental<br />
or non-Governmental, o<strong>the</strong>r entities and individuals.<br />
Article 13<br />
(a) A Participating Country for which <strong>the</strong> Agreement shall have ceased to be<br />
in force or to apply provisionally shall be deemed to have withdrawn from <strong>the</strong> Agency.<br />
(b) Notwithstanding <strong>the</strong> provisions <strong>of</strong> paragraph (a), a Country<br />
whose Government shall have signed <strong>the</strong> Agreement may, upon written<br />
notice to <strong>the</strong> Governing Board and to <strong>the</strong> Government <strong>of</strong> Belgium to <strong>the</strong><br />
effect that <strong>the</strong> adoption <strong>of</strong> <strong>the</strong> Program by <strong>the</strong> Governing Board is binding<br />
409
on it pursuant to this Decision, remain a Participating Country <strong>of</strong> <strong>the</strong><br />
Agency after <strong>the</strong> Agreement shall have ceased to apply for it, unless <strong>the</strong><br />
Governing Board decides o<strong>the</strong>rwise. Such a Country shall have <strong>the</strong> same<br />
obligations and <strong>the</strong> same rights as a Participating Country <strong>of</strong> <strong>the</strong> Agency for<br />
which <strong>the</strong> Agreement shall have entered definitively into force.<br />
Article 14<br />
<strong>The</strong> present Decision shall enter into force on 15th November,<br />
<strong>1974</strong>.<br />
410
APPENDIX V<br />
Energy<br />
Economic<br />
Analysis<br />
Organization <strong>of</strong> <strong>the</strong> <strong>IEA</strong> Secretariat 1 January <strong>1994</strong><br />
Administrative<br />
Unit<br />
EXECUTIVE DIRECTOR<br />
Special Assistant<br />
DEPUTY EXECUTIVE<br />
DIRECTOR<br />
Special Assistant<br />
Public Affairs<br />
Advisor<br />
Legal Counsel<br />
ECONOMICS,<br />
STATISTICS AND<br />
INFORMATION<br />
SYSTEMS<br />
OIL MARKETS<br />
AND<br />
EMERGENCY<br />
PREPAREDNESS<br />
LONG TERM<br />
CO-OPERATION<br />
AND POLICY<br />
ANALYSIS<br />
Energy<br />
Statistics<br />
Information<br />
Systems<br />
Oil Industry<br />
and<br />
Markets<br />
Emergency<br />
Planning and<br />
Preparations<br />
Energy<br />
Conservation<br />
& Efficiency<br />
Energy &<br />
Environment<br />
Energy<br />
Diversification<br />
NON-MEMBER<br />
COUNTRIES<br />
ENERGY<br />
TECHNOLOGY<br />
AND R&D<br />
Non-Member<br />
Countries - A<br />
(C&EE, ME,<br />
AF)<br />
Non-Member<br />
Countries - B<br />
(Asia, LA)<br />
Energy<br />
Technology<br />
Collaboration<br />
Energy<br />
Technology<br />
Policy<br />
Country<br />
Studies<br />
411
412
APPENDIX VI<br />
Highlights <strong>of</strong> Principal <strong>IEA</strong> Events<br />
<strong>1974</strong> - 1993<br />
<strong>The</strong> following Highlights are adapted from <strong>the</strong> <strong>IEA</strong> Governing Board’s<br />
Annual Reports to <strong>the</strong> OECD Council for <strong>the</strong> years <strong>1974</strong>-1993 and from<br />
o<strong>the</strong>r <strong>IEA</strong> publications and documents. <strong>The</strong>y have been compiled to give a<br />
rapid overview from an historical perspective and to help guide <strong>the</strong> reader<br />
to <strong>the</strong> underlying materials. Of course all items do not have <strong>the</strong> same<br />
status; many <strong>of</strong> <strong>the</strong>m are no longer applicable. More information can be<br />
found in <strong>the</strong> Annual Reports which are contained in <strong>the</strong> documents cited in<br />
<strong>the</strong> footnotes. Many <strong>of</strong> <strong>the</strong> energy policies and actions appearing in <strong>the</strong><br />
Highlights will be considered fur<strong>the</strong>r in <strong>Vol</strong>ume II <strong>of</strong> <strong>the</strong> <strong>History</strong>.<br />
<strong>1974</strong> 1<br />
<strong>The</strong> <strong>IEA</strong> is formally established as 16 countries sign <strong>the</strong> Agreement on an<br />
International Energy Program on 18 November in Paris.<br />
<strong>The</strong> Governing Board holds its first two meetings, adopts <strong>the</strong> Decision<br />
on <strong>the</strong> Program which incorporates <strong>the</strong> I.E.P. Agreement into <strong>IEA</strong> internal<br />
legislation, establishes <strong>the</strong> organization and operating policies <strong>of</strong> <strong>the</strong> Agency<br />
and develops <strong>the</strong> Agency’s work programme for <strong>the</strong> first year.<br />
<strong>The</strong> Governing Board appoints Dr. Ulf Lantzke as <strong>the</strong> <strong>IEA</strong>’s first<br />
Executive Director.<br />
<strong>IEA</strong> activities concentrate on <strong>the</strong> establishment <strong>of</strong> <strong>the</strong> Agency and on<br />
initial measures to implement <strong>the</strong> Agreement.<br />
1975 2<br />
<strong>The</strong> first <strong>IEA</strong> Ministerial Governing Board meeting reviews <strong>the</strong> world energy<br />
situation, sets guidelines for <strong>the</strong> Agency’s future work, and outlines <strong>the</strong> basis<br />
for long-term co-operation on general energy policies and energy R D & D.<br />
1 <strong>IEA</strong>/GB(75)90(2nd Rev.)<br />
2 <strong>IEA</strong>/GB(75)90(2nd Rev.)<br />
413
<strong>The</strong> Agency establishes itself in <strong>the</strong> OECD’s New Building in Paris.<br />
Mr. J. Wallace Hopkins is appointed Deputy Executive Director <strong>of</strong> <strong>the</strong><br />
Agency.<br />
New Zealand joins <strong>the</strong> <strong>IEA</strong>. Norway agrees to participate under <strong>the</strong><br />
terms <strong>of</strong> a special agreement. <strong>The</strong> I.E.P. Agreement is ratified by ten Members.<br />
<strong>IEA</strong> countries commit <strong>the</strong>mselves to reduce <strong>the</strong>ir total expected oil<br />
imports in 1975 by two million barrels a day through conservation,<br />
increased oil production, and fuel-switching.<br />
<strong>The</strong> Industry Advisory Board (IAB), composed <strong>of</strong> senior executives<br />
from fifteen private and state oil companies, is established to advise <strong>the</strong><br />
Agency on <strong>the</strong> oil Emergency Sharing System and to assist in testing and<br />
operating <strong>the</strong> System.<br />
<strong>IEA</strong> countries agree to increase by <strong>the</strong> beginning <strong>of</strong> 1976 <strong>the</strong>ir<br />
emergency oil stock holding commitment from 60 to 70 days <strong>of</strong> net oil<br />
imports. <strong>The</strong> Agency develops <strong>the</strong> oil emergency information system.<br />
Five R D & D Agreements are signed in <strong>the</strong> field <strong>of</strong> coal technology —<br />
<strong>the</strong> first energy R D & D collaborative projects to be carried out under <strong>IEA</strong><br />
auspices.<br />
<strong>The</strong> Governing Board adopts <strong>the</strong> <strong>IEA</strong> strategy for energy R D & D.<br />
<strong>The</strong> Agency’s general oil information system is established, toge<strong>the</strong>r<br />
with <strong>the</strong> permanent framework for consultations with oil companies on<br />
general and specific aspects <strong>of</strong> <strong>the</strong> oil market.<br />
1976 3<br />
<strong>The</strong> Agreement on an International Energy Program, <strong>the</strong> treaty which<br />
established <strong>the</strong> Agency in <strong>1974</strong>, <strong>of</strong>ficially enters into force on 19 January,<br />
after ratification by eleven Members.<br />
<strong>The</strong> Governing Board approves <strong>the</strong> <strong>IEA</strong>’s Long-Term Co-operation<br />
Programme to encourage Members to reduce <strong>the</strong>ir dependence on imported<br />
oil through greater use <strong>of</strong> alternative energy sources and structural changes<br />
in <strong>the</strong>ir energy economies. <strong>The</strong> Board also establishes medium and longrange<br />
goals for reducing <strong>IEA</strong> oil imports.<br />
<strong>The</strong> <strong>IEA</strong> completes its first comprehensive review <strong>of</strong> energy conservation<br />
programmes in Member countries.<br />
Greece joins <strong>the</strong> <strong>IEA</strong>.<br />
<strong>The</strong> <strong>IEA</strong> conducts its first test <strong>of</strong> <strong>the</strong> emergency oil-sharing system<br />
(AST-1).<br />
3 <strong>IEA</strong>/GB(77)3(1st Revision)<br />
414
<strong>IEA</strong> countries agree to increase by <strong>the</strong> beginning <strong>of</strong> 1980 <strong>the</strong>ir<br />
emergency oil stock holdings to 90 days <strong>of</strong> net oil imports.<br />
<strong>The</strong> <strong>IEA</strong> participates as a permanent observer in <strong>the</strong> Energy<br />
Commission <strong>of</strong> <strong>the</strong> Conference on International Economic Co-operation<br />
held in Paris.<br />
1977 4<br />
<strong>The</strong> second <strong>IEA</strong> Ministerial meeting adopts <strong>the</strong> Decision on Group<br />
Objectives and Principles for Energy Policy, setting a goal for limiting oil<br />
imports in <strong>IEA</strong> countries in 1985, establishing twelve Principles for Energy<br />
Policy and ordering systematic annual reviews <strong>of</strong> <strong>the</strong> energy policies and<br />
programmes <strong>of</strong> Member countries.<br />
<strong>The</strong> <strong>IEA</strong> publishes <strong>the</strong> first World Energy Outlook, which forecasts<br />
energy trends to 1990.<br />
<strong>The</strong> <strong>IEA</strong> continues to play an active role in assisting <strong>the</strong> co-ordination<br />
<strong>of</strong> <strong>the</strong> views <strong>of</strong> <strong>IEA</strong> Members in <strong>the</strong> Energy Commission <strong>of</strong> <strong>the</strong> Conference<br />
on International Economic Co-operation. <strong>The</strong> Governing Board adopts its<br />
Preliminary Guidelines for Collaboration on Energy R & D between <strong>IEA</strong><br />
Countries and Developing Countries.<br />
1978 5<br />
<strong>The</strong> <strong>IEA</strong> publishes its first annual review <strong>of</strong> energy policies and<br />
programmes, covering events in 1977.<br />
<strong>The</strong> <strong>IEA</strong> holds its second test <strong>of</strong> <strong>the</strong> emergency allocation system<br />
(AST-2), involving national emergency supply organisations (NESOs) for <strong>the</strong><br />
first time. Over <strong>20</strong>0 national and international oil companies participate.<br />
<strong>The</strong> <strong>IEA</strong> sponsors a workshop in Paris on energy data relating to<br />
developing countries. <strong>The</strong> Agency publishes Basic Energy Statistics and<br />
Energy Balances <strong>of</strong> Developing Countries, 1967-1977.<br />
<strong>The</strong> <strong>IEA</strong> publication Steam Coal Prospects to <strong>20</strong>00 calls for wider<br />
substitution <strong>of</strong> coal for oil to sustain economic growth in <strong>IEA</strong> and<br />
developing countries.<br />
<strong>The</strong> total number <strong>of</strong> energy R & D projects under way rises to thirtyfive.<br />
<strong>The</strong> Secretariat hosts a Workshop on Energy Data <strong>of</strong> Developing<br />
Countries which is attended by experts from fifteen developing countries.<br />
4 <strong>IEA</strong>/GB(78)1<br />
5 <strong>IEA</strong>/GB(79)2<br />
415
1979 6<br />
In March, <strong>the</strong> Governing Board meets in response to oil supply problems<br />
arising out <strong>of</strong> <strong>the</strong> loss <strong>of</strong> Iranian oil in <strong>the</strong> market. <strong>IEA</strong> Member countries<br />
agree to take prompt action to reduce <strong>the</strong>ir demand for oil by two million<br />
barrels per day (five percent <strong>of</strong> consumption).<br />
<strong>The</strong> <strong>IEA</strong>’s emergency data system is used to monitor <strong>the</strong> world oil<br />
supply situation following <strong>the</strong> revolution in Iran.<br />
<strong>IEA</strong> Ministers meet twice during <strong>the</strong> year. In May, Ministers assess <strong>the</strong><br />
oil market situation and note that <strong>the</strong> world energy supply situation would<br />
be tight for <strong>the</strong> foreseeable future. <strong>The</strong>y confirm <strong>the</strong> Board’s action to reduce<br />
oil demand by five per cent and emphasize <strong>the</strong> need for continuing efforts to<br />
reduce oil imports. Ministers also adopt principles for increased production,<br />
trade and use <strong>of</strong> coal. <strong>The</strong> Ministerial statement recognizes that expansion <strong>of</strong><br />
coal use must proceed under acceptable environmental conditions.<br />
In December, <strong>IEA</strong> Ministers agree on measures to promote more stable<br />
oil market conditions, including national oil import ceilings for 1980 and<br />
goals for 1985, increased monitoring <strong>of</strong> energy policies and developments,<br />
and procedures for consultation on oil stocks.<br />
Australia joins <strong>the</strong> <strong>IEA</strong>.<br />
<strong>The</strong> <strong>IEA</strong> completes a study <strong>of</strong> opportunities for co-operation between<br />
industrial and developing countries on new and renewable sources <strong>of</strong> energy.<br />
<strong>The</strong> Governing Board adopts Principles for <strong>IEA</strong> Action on Coal as<br />
part <strong>of</strong> <strong>the</strong> Agency’s effort to reduce dependence on imported oil through<br />
<strong>the</strong> development <strong>of</strong> alternative energy sources.<br />
<strong>The</strong> Coal Industry Advisory Board (CIAB) is created to make<br />
available to <strong>the</strong> Agency advice and expertise from senior executives <strong>of</strong><br />
companies engaged in various aspects <strong>of</strong> coal production, transport and use.<br />
<strong>IEA</strong> countries are engaged in forty-eight collaborative projects in<br />
energy R & D.<br />
1980 7<br />
<strong>IEA</strong> Ministers again meet twice during <strong>the</strong> year. In May Ministers express<br />
renewed concern about economic effects <strong>of</strong> high oil prices. <strong>The</strong>y agree to<br />
tighten oil import targets for 1985, to continue efforts to reduce oil imports<br />
beyond that date, and to streng<strong>the</strong>n measures for dealing with short-term<br />
oil market disruptions.<br />
6 <strong>IEA</strong>/GB(80)13<br />
7 <strong>IEA</strong>/GB(81)25<br />
416
In October, <strong>IEA</strong> Countries react quickly to prevent pressures on <strong>the</strong> oil<br />
market through oil supply losses caused by <strong>the</strong> Iran-Iraq war. Measures<br />
include oil stock drawdowns, consultations between <strong>IEA</strong> governments and<br />
oil companies, and reinforced conservation and fuel-switching.<br />
In December <strong>IEA</strong> Ministers streng<strong>the</strong>n <strong>the</strong> measures taken in October<br />
to maintain <strong>the</strong> balance between oil supply and demand. <strong>The</strong> Ministers<br />
adopt lines <strong>of</strong> action for energy conservation and fuel-switching. <strong>The</strong>y also<br />
receive <strong>the</strong> first report <strong>of</strong> <strong>the</strong> CIAB Coal Action Programme, with recommendations<br />
for actions to double coal use by 1990 and to triple it by <strong>20</strong>00.<br />
Portugal completes procedures to join <strong>the</strong> Agency, bringing <strong>the</strong> total<br />
<strong>IEA</strong> membership to twenty-one countries.<br />
<strong>The</strong> <strong>IEA</strong> conducts <strong>the</strong> third Allocations Systems Test <strong>of</strong> <strong>the</strong> Agency’s<br />
Emergency Sharing System (AST-3), with expanded scope including<br />
increased industry participation, as fourteen additional co-operating oil<br />
companies joined in for <strong>the</strong> first time.<br />
<strong>The</strong> Governing Board establishes <strong>the</strong> <strong>IEA</strong> Dispute Settlement Centre,<br />
which provides a system <strong>of</strong> binding arbitration for disputes between oil<br />
companies on actions taken in co-operation with <strong>the</strong> Agency in an oil supply<br />
emergency.<br />
<strong>The</strong> <strong>IEA</strong>’s study Group Strategy for Energy Research, Demonstration<br />
and Development concludes that accelerating development and commercialization<br />
<strong>of</strong> new energy technologies could reduce <strong>IEA</strong> oil imports by<br />
nearly six million barrels per day by <strong>the</strong> year <strong>20</strong>00.<br />
1981 8<br />
<strong>IEA</strong> Ministers note <strong>the</strong> improved world oil market situation, but stress that<br />
<strong>the</strong> oil market balance remains fragile. <strong>The</strong>y agree on <strong>the</strong> need for more<br />
progress in achieving structural change in <strong>IEA</strong> energy economies.<br />
<strong>The</strong> <strong>IEA</strong> sponsors a symposium on energy and <strong>the</strong> economy in Paris<br />
and a conference on commercializing new conservation technologies in<br />
Berlin.<br />
<strong>The</strong> <strong>IEA</strong> takes part in <strong>the</strong> United Nations Conference on New and<br />
Renewable Sources <strong>of</strong> Energy in Nairobi, Kenya.<br />
Acting on <strong>the</strong> report <strong>of</strong> an Ad Hoc Group, <strong>the</strong> Governing Board, in<br />
December, adopts <strong>the</strong> Decision on Preparation for Future Supply Disruptions,<br />
with flexible arrangements for responding to oil supply disruptions<br />
which do not reach <strong>the</strong> seven per cent level required to trigger <strong>the</strong> emergency<br />
8 <strong>IEA</strong>/GB(82)7<br />
417
allocation system. <strong>The</strong> new arrangements provide for continuous monitoring<br />
<strong>of</strong> supply, improved information, prompt convening <strong>of</strong> <strong>the</strong> Board to consider<br />
responses, and a range <strong>of</strong> possible actions.<br />
1982 9<br />
<strong>IEA</strong> Ministers agree to continue efforts to improve overall energy efficiency<br />
and to bring about a more balanced energy mix which minimizes oil use.<br />
<strong>The</strong> Agency and <strong>the</strong> CIAB publish <strong>The</strong> Use <strong>of</strong> Coal in Industry, which<br />
shows a large potential for growth <strong>of</strong> coal use in industrial sectors <strong>of</strong> <strong>IEA</strong><br />
countries. Following a CIAB recommendation, <strong>the</strong> Agency developed a Coal<br />
Information System.<br />
<strong>The</strong> <strong>IEA</strong> and <strong>the</strong> CIAB hold a conference in Paris on “<strong>The</strong> Use <strong>of</strong> Coal in<br />
Industry” for senior executives from coal-using industries. <strong>The</strong> <strong>IEA</strong> publishes<br />
its first bi-annual review on coal prospects and policies <strong>of</strong> <strong>IEA</strong> countries.<br />
<strong>The</strong> <strong>IEA</strong> concludes in its publication Natural Gas: Prospects to <strong>20</strong>00<br />
that significant world-wide natural gas resources could support expanded<br />
use <strong>of</strong> gas, but that this would require <strong>IEA</strong> countries to increase imports and<br />
could create energy security problems.<br />
<strong>The</strong> <strong>IEA</strong> and <strong>the</strong> Nuclear Energy Agency jointly publish Nuclear<br />
Energy Prospects to <strong>20</strong>00. <strong>The</strong> report calls for measures to speed up <strong>the</strong><br />
construction and licensing <strong>of</strong> nuclear power stations.<br />
<strong>The</strong> second World Energy Outlook, which projects energy and oil<br />
demand to <strong>20</strong>00, is published by <strong>the</strong> Agency.<br />
1983 10<br />
<strong>IEA</strong> Ministers, recognizing <strong>the</strong> continued likelihood <strong>of</strong> heavy reliance on<br />
imported energy and especially oil, assess energy requirements and security<br />
<strong>of</strong> <strong>the</strong> next two decades. <strong>The</strong>y agree to avoid undue dependence on any one<br />
source <strong>of</strong> gas imports and to obtain future supplies from secure sources,<br />
with emphasis on gas produced in <strong>IEA</strong> countries.<br />
Coal Use and <strong>the</strong> Environment, a CIAB study, concludes that existing<br />
technology permits <strong>the</strong> use <strong>of</strong> coal to be expanded in an environmentally<br />
acceptable manner. <strong>The</strong> study suggests actions government and industry<br />
can take to increase coal use.<br />
<strong>The</strong> <strong>IEA</strong> sponsors a workshop on methods <strong>of</strong> formulating energy<br />
policy. Participants from government, industry, and <strong>the</strong> academic community<br />
9 <strong>IEA</strong>/GB(83)4<br />
10 <strong>IEA</strong>/GB(84)10<br />
418
examine such issues as criteria for energy investment and <strong>the</strong> role <strong>of</strong> energy<br />
prices in policy making.<br />
<strong>The</strong> <strong>IEA</strong> begins <strong>the</strong> commercial publication <strong>of</strong> <strong>the</strong> <strong>IEA</strong> monthly Oil<br />
Market Report.<br />
<strong>The</strong> fourth Test <strong>of</strong> <strong>the</strong> Emergency Allocation System (AST-4)<br />
provides valuable operational training to all participants in <strong>the</strong> System,<br />
including <strong>of</strong>ficers <strong>of</strong> Member governments and oil companies as well as<br />
members <strong>of</strong> <strong>the</strong> Secretariat.<br />
<strong>The</strong> total <strong>IEA</strong> portfolio <strong>of</strong> energy R & D collaborative projects<br />
continues to grow, now approaching fifty projects.<br />
1984 11<br />
<strong>The</strong> <strong>IEA</strong>’s second coal review calls for greater reliance on coal by Member<br />
countries. Costs <strong>of</strong> coal production and transport can probably be kept<br />
down, <strong>the</strong> report says, and if so, coal can remain cost-competitive.<br />
In July Mrs. Helga Steeg <strong>of</strong> <strong>the</strong> Federal Republic <strong>of</strong> Germany takes<br />
over as <strong>the</strong> <strong>IEA</strong> Executive Director upon <strong>the</strong> retirement <strong>of</strong> Dr. Ulf Lantzke,<br />
<strong>the</strong> <strong>IEA</strong>’s first Executive Director.<br />
<strong>The</strong> <strong>IEA</strong> Governing Board adopts its Decision on Stocks and Supply<br />
Disruptions, with procedures to enable governments to decide promptly on early<br />
co-ordinated use <strong>of</strong> oil stocks and o<strong>the</strong>r measures in <strong>the</strong> event <strong>of</strong> a significant oil<br />
supply disruption if this is judged necessary to prevent economic damage.<br />
<strong>The</strong> annual review <strong>of</strong> <strong>IEA</strong> R D & D programmes shows Member<br />
governments are spending almost seven billion dollars annually on publiclyfunded<br />
energy R D & D programmes. <strong>The</strong> report says this demonstrates a<br />
continuing strong commitment to energy research, despite budgetary<br />
constraints and a well supplied world oil market.<br />
1985 12<br />
<strong>IEA</strong> Ministers state that it would be “imprudent and even dangerous” for <strong>IEA</strong><br />
countries to ignore forecasts <strong>of</strong> tightening energy markets in <strong>the</strong> 1990s, and<br />
advocate continuing efforts to reduce dependence on imported oil. Noting<br />
significant overcapacity in oil refineries, including new refineries outside <strong>IEA</strong><br />
countries, Ministers agree to a common approach whereby imported refined<br />
oil products can go to markets <strong>of</strong> different <strong>IEA</strong> countries on <strong>the</strong> basis <strong>of</strong><br />
supply and demand as determined by market forces without distortions.<br />
11 <strong>IEA</strong>/GB(85)16<br />
12 <strong>IEA</strong>/GB(86)1<br />
419
An <strong>IEA</strong> study reports distinct improvement in fuel efficiency <strong>of</strong><br />
passenger cars in Member countries over a ten-year period, but expresses<br />
concern that fur<strong>the</strong>r progress might be hampered by <strong>the</strong> <strong>the</strong>n current and<br />
easier oil market situation, declining consumer interest in fuel efficiency,<br />
and rising incomes. <strong>The</strong> study warns <strong>of</strong> a shift in consumer demand toward<br />
larger and less fuel-efficient cars.<br />
<strong>The</strong> <strong>IEA</strong> publishes a study on <strong>the</strong> outlook for electricity. <strong>The</strong> study<br />
says governments and electric utilities in <strong>the</strong> industrialized countries should<br />
do more to overcome obstacles preventing electricity from making its full<br />
contribution to economic development and energy security.<br />
<strong>The</strong> <strong>IEA</strong>’s annual review <strong>of</strong> energy policies and programmes says<br />
Member countries’ oil production has probably reached its peak and is<br />
projected to decline. <strong>The</strong> review foresees a massive expansion <strong>of</strong> coal and<br />
nuclear energy production, and considerable growth <strong>of</strong> hydropower for <strong>the</strong><br />
rest <strong>of</strong> <strong>the</strong> century.<br />
<strong>The</strong> fifth Allocation Systems Test (AST-5) was conducted with new<br />
data quality features to make <strong>the</strong> test a more realistic simulation <strong>of</strong><br />
emergency conditions.<br />
With <strong>the</strong> completion <strong>of</strong> a number <strong>of</strong> energy R & D projects and <strong>the</strong><br />
commencement <strong>of</strong> o<strong>the</strong>rs, <strong>the</strong> project portfolio covers about fifty different<br />
activities in end-use technology, fossil fuel technology, renewable energy<br />
development and controlled nuclear fusion.<br />
1986 13<br />
<strong>The</strong> United States, Japan, and <strong>the</strong> European Community, in an agreement<br />
negotiated under <strong>the</strong> auspices <strong>of</strong> <strong>the</strong> Agency, establish an <strong>IEA</strong> collaborative<br />
project on research into advanced nuclear fusion energy. <strong>The</strong> agreement<br />
provides for exchanges <strong>of</strong> information derived from <strong>the</strong>ir experimental large<br />
Tokamak facilities, designed to develop nuclear fusion as a potential source<br />
<strong>of</strong> commercial electricity generation.<br />
<strong>The</strong> 1985 <strong>IEA</strong> country review sees <strong>the</strong> merger <strong>of</strong> <strong>the</strong> reviews <strong>of</strong> energy<br />
policies and programmes <strong>of</strong> energy R D & D policies into a single integrated<br />
country review process.<br />
<strong>The</strong> likely effects <strong>of</strong> changes in <strong>the</strong> energy and price outlook on <strong>the</strong><br />
development <strong>of</strong> alternative fuels and <strong>the</strong> implications <strong>of</strong> <strong>the</strong> Chernobyl<br />
accident for <strong>the</strong> provision <strong>of</strong> future electricity generation capacity are also<br />
examined in <strong>the</strong> Agency.<br />
13 <strong>IEA</strong>/GB(87)4<br />
4<strong>20</strong>
In <strong>the</strong> oil emergency sector, a critical review is made <strong>of</strong> Members’<br />
legislative provisions for implementing stockdraw in an I.E.P. emergency oil<br />
sharing trigger situation as well as in a lesser supply disruption.<br />
1987 14<br />
<strong>IEA</strong> Ministers underscore <strong>the</strong> <strong>IEA</strong>’s central objective <strong>of</strong> <strong>the</strong> security <strong>of</strong> energy<br />
supply to ensure economic well-being. <strong>The</strong>y give impetus to <strong>the</strong> Agency’s<br />
work in technology developments, <strong>the</strong> inter-relationships between energy<br />
and <strong>the</strong> environment, and better understanding <strong>of</strong> <strong>the</strong> energy economies <strong>of</strong><br />
developing countries and o<strong>the</strong>r non-Member countries.<br />
<strong>The</strong> <strong>IEA</strong> publishes a study entitled Energy Conservation in <strong>IEA</strong><br />
Countries, on <strong>the</strong> improvement <strong>of</strong> energy efficiency and <strong>the</strong> measures<br />
available to governments to promote efficiency.<br />
Eleven <strong>IEA</strong> countries join in a new R & D project on co-ordinated<br />
exchanges <strong>of</strong> energy technology information through a national computerbased<br />
system (at Oak Ridge, Tennessee).<br />
An Energy Data Workshop is held in Tokyo in conjunction with <strong>the</strong><br />
Asian Development Bank, several Member governments and representatives<br />
from twelve developing countries.<br />
1988 15<br />
Energy security and environment considerations are integrated into most<br />
<strong>IEA</strong> activities.<br />
<strong>The</strong> <strong>IEA</strong> publishes Energy Efficiency Update, designed to facilitate<br />
exchange among Member countries <strong>of</strong> information on innovative efficiency<br />
programmes.<br />
<strong>The</strong> <strong>IEA</strong> “Operations Manual - Consultations on Co-ordinated<br />
Emergency Response Measures (CERM)” is adopted, and a test <strong>of</strong> CERM is<br />
conducted for <strong>the</strong> first time to test procedures under <strong>the</strong> <strong>IEA</strong>’s 1984<br />
Decision on Stocks and Supply Disruptions.<br />
<strong>The</strong> Agency again tests <strong>the</strong> Emergency Sharing System (AST-6) to<br />
assess <strong>the</strong> readiness <strong>of</strong> <strong>the</strong> System and <strong>the</strong> application <strong>of</strong> improved<br />
procedures.<br />
<strong>The</strong> Centre for Analysis and Dissemination <strong>of</strong> Demonstrated Energy<br />
Technologies (CADDET) is launched in March to facilitate <strong>the</strong> sharing <strong>of</strong><br />
technologies ready for introduction into <strong>the</strong> market.<br />
14 <strong>IEA</strong>/GB(88)10<br />
15 <strong>IEA</strong>/GB(89)10<br />
421
1989 16<br />
<strong>IEA</strong> Ministers note gains in energy security, efficiency, conservation,<br />
emergency preparedness, R & D collaboration and o<strong>the</strong>r sectors; <strong>the</strong>y view<br />
with concern growing world-wide oil consumption and environmental<br />
effects <strong>of</strong> energy consumption. Ministers reconfirm <strong>the</strong>ir commitment to<br />
ensuring energy security and policy objectives while also achieving a healthy<br />
environment.<br />
Mr. John P. Ferriter is appointed Deputy Executive Director <strong>of</strong> <strong>the</strong><br />
Agency.<br />
<strong>The</strong> <strong>IEA</strong> publishes Energy and <strong>the</strong> Environment - Policy Overview, a<br />
study <strong>of</strong> <strong>the</strong> long-term impacts on energy security <strong>of</strong> proposed<br />
environmental measures, and <strong>the</strong> policy choices to achieve energy and<br />
environmental objectives.<br />
<strong>The</strong> <strong>IEA</strong> participates in <strong>the</strong> work <strong>of</strong> <strong>the</strong> Intergovernmental Panel on<br />
Climate Change (IPCC) and o<strong>the</strong>r energy and <strong>the</strong> environment activities.<br />
<strong>The</strong> Agency intensifies its work on energy and environment questions<br />
in Eastern Europe, and begins preparations for a seminar on <strong>the</strong> Polish<br />
energy sector, sponsored by Denmark, Poland and <strong>the</strong> <strong>IEA</strong>.<br />
1990 17<br />
With <strong>the</strong> Iraqi invasion <strong>of</strong> Kuwait in August, <strong>the</strong> <strong>IEA</strong> moves into a phase <strong>of</strong><br />
urgent operational work which continues through 1990 and into 1991. <strong>The</strong><br />
<strong>IEA</strong> emergency oil data system is activated. <strong>IEA</strong> countries devise<br />
emergency response programmes to deal with various possible scenarios,<br />
update <strong>the</strong>m monthly and take actions to ensure Members’ preparations to<br />
respond adequately to an oil supply disruption, mainly by demand restraint<br />
and stockdraw.<br />
<strong>The</strong> <strong>IEA</strong> devotes major attention to analysis <strong>of</strong> <strong>the</strong> energy situation in<br />
Eastern Europe and <strong>the</strong> Soviet Union. <strong>The</strong> Secretariat participates actively<br />
in <strong>the</strong> G-24 process to co-ordinate assistance to <strong>the</strong> energy sectors <strong>of</strong><br />
Eastern Europe.<br />
<strong>The</strong> Agency joins in preparation <strong>of</strong> <strong>the</strong> study <strong>of</strong> <strong>The</strong> Economy <strong>of</strong> <strong>the</strong><br />
USSR, with <strong>the</strong> IMF, IBID, OECD and EBRD, acting upon <strong>the</strong> request by<br />
<strong>the</strong> Houston G-7 Summit in July.<br />
Five new <strong>IEA</strong> energy R & D collaborative project Implementing<br />
Agreements are signed, and <strong>the</strong> corresponding projects are launched.<br />
16 <strong>IEA</strong>/GB(90)4<br />
17 <strong>IEA</strong>/GB(91)16<br />
422
1991 18<br />
All <strong>IEA</strong> countries, joined by France, Finland and Iceland, agree to a Coordinated<br />
Energy Emergency Contingency Plan in <strong>the</strong> Gulf Crisis, a 2.5<br />
million barrels-a-day contingency plan for a mix <strong>of</strong> stockdraw, demand<br />
restraint, fuel switching and increased indigenous production to reduce<br />
demand for oil, reassure <strong>the</strong> market and avoid disruption <strong>of</strong> supplies. <strong>The</strong><br />
Governing Board adopts <strong>the</strong> Plan on 11 January and <strong>the</strong> Executive Director<br />
activates it on 17 January shortly after <strong>the</strong> war begins. <strong>The</strong> Board<br />
terminates <strong>the</strong> Plan in March after <strong>the</strong> war ends.<br />
<strong>IEA</strong> Ministers meet in June to evaluate <strong>the</strong> <strong>IEA</strong> countries’ actions<br />
during <strong>the</strong> Gulf Crisis, and express continuing commitment to energy security.<br />
<strong>The</strong>y also reaffirm <strong>the</strong> importance <strong>of</strong> environmental protection and economic<br />
growth, <strong>the</strong> need to address <strong>the</strong> global warming issue and <strong>the</strong> importance <strong>of</strong><br />
sound relations between industrial and oil producing countries.<br />
<strong>The</strong> <strong>IEA</strong> participates actively with Member countries, Eastern Europe<br />
and <strong>the</strong> NIS in <strong>the</strong> negotiation <strong>of</strong> <strong>the</strong> European Energy Charter on energy<br />
investment and trade and dispute settlement arrangements for that sector.<br />
<strong>The</strong> Charter is adopted in December as negotiations continue for <strong>the</strong><br />
purpose <strong>of</strong> preparing an international agreement on this subject.<br />
<strong>The</strong> Agency produces its report Climate Change Policy Initiatives:<br />
Update for use in <strong>the</strong> climate change framework negotiations.<br />
<strong>The</strong> <strong>IEA</strong> completes its study Assessment <strong>of</strong> Energy Technology Priority<br />
Areas: Energy Technology Strategy.<br />
<strong>The</strong> <strong>IEA</strong> continues strong interest in Eastern and Central Europe. <strong>The</strong><br />
Agency publishes <strong>the</strong> Survey <strong>of</strong> <strong>the</strong> Polish Energy Sector and <strong>the</strong> Surveys <strong>of</strong><br />
<strong>the</strong> Energy Policies <strong>of</strong> Hungary and <strong>the</strong> Czech and Slovak Federal Republic.<br />
<strong>The</strong> <strong>IEA</strong> monthly Oil Market Report is expanded with specific<br />
information on <strong>the</strong> former Centrally Planned Economies (CPE) region.<br />
<strong>The</strong> Agency expands its contacts with <strong>the</strong> Dynamic Asian Economies,<br />
with Latin America and <strong>the</strong> Latin American Energy Organization (OLADE)<br />
and o<strong>the</strong>r regions where energy use influences <strong>the</strong> global economy and <strong>the</strong><br />
environment.<br />
1992 19<br />
<strong>The</strong> <strong>IEA</strong> welcomes Finland and France as new Members, bringing <strong>IEA</strong><br />
membership up to 23 countries (all OECD countries except Iceland).<br />
18 <strong>IEA</strong>/GB(92)2<br />
19 <strong>IEA</strong>/GB(93)8<br />
423
<strong>The</strong> <strong>IEA</strong> hosts a high-level technical conference <strong>of</strong> energy experts on issues <strong>of</strong><br />
common interest to energy importing and exporting countries with <strong>the</strong> objectives <strong>of</strong><br />
enhancing communication and mutual understanding between energy importers<br />
and exporters, and increasing market transparency and efficiency.<br />
<strong>The</strong> Agency continues active participation in <strong>the</strong> negotiation <strong>of</strong> <strong>the</strong><br />
European Energy Charter Agreement.<br />
<strong>The</strong> <strong>IEA</strong> integrates and enhances its work in <strong>the</strong> energy and <strong>the</strong><br />
environment field, forming a new Division <strong>of</strong> <strong>the</strong> Secretariat for that purpose.<br />
On behalf <strong>of</strong> <strong>the</strong> G-7, <strong>the</strong> <strong>IEA</strong> Secretariat and <strong>the</strong> World Bank carry out a<br />
study <strong>of</strong> alternative ways <strong>of</strong> meeting electricity demand in Central and Eastern<br />
Europe and in <strong>the</strong> Newly Independent States (NIS) in <strong>the</strong> event <strong>of</strong> closure for<br />
safety reasons <strong>of</strong> some nuclear powers stations in that part <strong>of</strong> <strong>the</strong> world.<br />
<strong>The</strong> Executive Director addresses <strong>the</strong> United Nations Conference on<br />
Environment and Development where <strong>IEA</strong> <strong>of</strong>fers energy information and<br />
policy assistance.<br />
<strong>The</strong> <strong>IEA</strong> publishes <strong>The</strong> Role <strong>of</strong> <strong>IEA</strong> Governments in Energy, a survey <strong>of</strong><br />
government involvement in all segments <strong>of</strong> <strong>the</strong> energy sectors <strong>of</strong> <strong>IEA</strong> countries.<br />
<strong>The</strong> Emergency Sharing System, is again tested (AST-7), <strong>the</strong> seventh test in<br />
this series, including for <strong>the</strong> first time Finland, France and <strong>the</strong> whole <strong>of</strong> Germany.<br />
<strong>The</strong> Agency continues its work on Central and Eastern Europe and<br />
<strong>the</strong> NIS in carrying out energy surveys, publishing reports and organizing<br />
seminars and conferences.<br />
<strong>The</strong> Agency conducts an in-depth energy review <strong>of</strong> Korea, <strong>the</strong> first<br />
<strong>IEA</strong> review <strong>of</strong> a non-Member country in <strong>the</strong> Asia-Pacific region.<br />
<strong>The</strong> <strong>IEA</strong> encourages non-Member and international organization<br />
participation in energy R & D Implementing Agreements, creating a new<br />
relationship <strong>of</strong> “Associate Contracting Party” for that purpose. Non-<br />
Member “Associate” participation in certain <strong>IEA</strong> energy R & D Implementing<br />
Agreements is extended to Israel and Malaysia.<br />
Thirty-five separate energy R & D Implementing Agreements are in<br />
force, five more are prepared and proposed for signature.<br />
<strong>The</strong> <strong>IEA</strong> publishes Collaboration in Energy Technology: 1987-1990<br />
which reviews <strong>the</strong> effectiveness <strong>of</strong> <strong>the</strong> Agency’s programme in this sector<br />
over <strong>the</strong> four year period.<br />
1993 <strong>20</strong><br />
<strong>IEA</strong> Ministers assess <strong>the</strong> current energy situation and trends against <strong>the</strong><br />
backdrop <strong>of</strong> <strong>the</strong> Agency’s World Energy Outlook to <strong>20</strong>10. <strong>The</strong>y adopt <strong>IEA</strong><br />
<strong>20</strong> <strong>IEA</strong>/GB(94)8<br />
424
Shared Goals on essential framework conditions for energy policy and cooperation,<br />
and commend <strong>the</strong>m to non-Members <strong>of</strong> <strong>the</strong> Agency as well.<br />
Ministers agree that concerted policy actions should be taken in respect <strong>of</strong><br />
emergency response mechanisms, diversity <strong>of</strong> energy sources, energy<br />
efficiency, minimization <strong>of</strong> adverse environmental impacts and expanding<br />
relations with particular non-<strong>IEA</strong> Member countries.<br />
<strong>The</strong> <strong>IEA</strong>, jointly with <strong>the</strong> OECD, organizes a conference on <strong>the</strong><br />
Economics <strong>of</strong> Climate Change.<br />
<strong>The</strong> <strong>IEA</strong> launches a newsletter, <strong>the</strong> Energy Environment Update.<br />
<strong>The</strong> Governing Board agrees to conduct in March <strong>1994</strong> in Switzerland<br />
an informal Ministerial “brainstorming” meeting on energy and <strong>the</strong><br />
environment, <strong>the</strong> first <strong>IEA</strong> “brainstorming” meeting at Ministerial Level.<br />
<strong>The</strong> Agency publishes <strong>the</strong> World Energy Outlook which examines <strong>the</strong><br />
current energy situation and alternatives <strong>of</strong> <strong>the</strong> global energy system to <strong>the</strong><br />
year <strong>20</strong>10.<br />
<strong>The</strong> <strong>IEA</strong> organizes a Workshop on Stockdraw and Emergency<br />
Response management to be held in Japan in February <strong>1994</strong>.<br />
<strong>The</strong> Agency continues to participate directly and actively in <strong>the</strong><br />
Brussels negotiations on <strong>the</strong> proposed European Energy Charter Agreement.<br />
<strong>The</strong> <strong>IEA</strong> hosts a second major conference <strong>of</strong> technical experts from<br />
energy exporting and importing countries, with over forty countries<br />
participating. <strong>The</strong> conference concentrates on projections <strong>of</strong> oil demand, on<br />
exploration and production cost developments, including environmental<br />
costs, and on investment needs.<br />
In a series <strong>of</strong> in-depth country reports on <strong>the</strong> energy situation in<br />
Central and Eastern Europe, <strong>the</strong> <strong>IEA</strong> completes a report on Romania.<br />
<strong>The</strong> Government <strong>of</strong> Korea expresses its intention to seek <strong>IEA</strong><br />
membership in parallel with OECD membership. An <strong>IEA</strong>/Korea Conference<br />
on Demand-Side Management is convened in Seoul in November.<br />
<strong>The</strong> <strong>IEA</strong> expands its relations with countries in Latin America and<br />
Asia.<br />
Non-Member “Associate” participation in certain <strong>IEA</strong> energy R & D<br />
Implementing Agreements is extended to Korea, <strong>the</strong> Russian Federation,<br />
Israel and Poland.<br />
<strong>The</strong> <strong>IEA</strong> adds to its Implementing Agreements portfolio several new<br />
projects, for work on an international natural gas research and technology<br />
information centre, on photovoltaic power systems, on electric demand-side<br />
management and on a Greenhouse Gas Technology Information Exchange<br />
(GREENTIE). New projects on electric vehicle technologies and nuclear<br />
fusion power reactors are also agreed.<br />
425
OECD PUBLICATIONS, 2 rue André-Pascal, 75775 PARIS CEDEX 16<br />
PRINTED IN FRANCE<br />
(61 94 02 1) ISBN 92-64-14059-X - N° 46984 <strong>1994</strong>